The price of Binance Coin (BNB), the cryptocurrency owned by Binance and Binance Smart Chain, has increased by more than 20% in the last 24 hours.
15-minute BNB / USDT price chart (Binance). Source: TradingView
The rapid recovery came after a market-wide correction on Sunday, in which major cryptocurrencies, including Bitcoin (BTC) and Ether (ETH), withdrew.
For example, the price of ETH fell from $ 2,400 to $ 1,900 in a sharp decline as the price of Bitcoin fell below the $ 60,000 support level to $ 52,000.
Revive the hectic futures market
In a short time, there was a sharp decline in the market as the futures market was extremely overheated.
Cryptocurrency positions worth $ 10 billion were wound up in one day, of which more than $ 5 billion was Bitcoin.
Since the decline was technical rather than fundamental, and it was a series of liquidations that caused the decline, the market compensated relatively quickly for most of the losses.
It was also clear that the futures market controlled the correction because the price of the largest cryptocurrencies in the futures market was lower than it was in the spot market.
Adam Cochrane, partner at Cinneamhain Ventures explained:
“I think what we saw was a series of heavily twisted retail centers in the weekend market that were wiped out, but somewhere along the line there was a bug in the corresponding book that led to the stop loss failing, and when it did, $ 63 million position.” game. ”
He added that the liquidation of the $ 63 million position had shocked the market and even put large cryptocurrencies in danger of a rapid decline.
“The liquidation of the $ 63 million position was a serious risk to the market, but at that time there were already performance issues related to Binance and a sharp rise in petrol prices. So there was very little chance for anyone to support or mediate this liquidation. ”
The basics of BNB are still strong
After the first fall from the futures market, cryptocurrencies with strong fundamentals were the first to recover.
While bitcoin and ether prices rose relatively quickly, 12% and 15% from the low price, BNB has surpassed BTC and ETH in the last 24 hours of recovery.
BNB’s strong results stem from two positive catalysts: the $ 600 million record burning BNB from Binance and an upward trend in Binance Smart Chain performance.
The Cointelegraph reported on Friday that Binance burned BNB worth $ 600 million in the first quarter of 2021, reducing its circulation supply and indicating that the stock market made at least $ 750 million in quarterly profits.
Binance chief Changpeng Zhao on Sunday confirmed that the Binance team has no plans to sell its BNB assets – 40% of the total – in potential research by Coinbase insiders, who sold $ 5 billion in COIN shares in last week. . …
As the market began to recover, BNB saw a stronger rally, possibly as a result of a late reaction to a $ 600 million burnout.
In addition to burning tokens, the number of daily transactions on Binance Smart Chain has exceeded 5 million.
Number of Binance Smart Chain transactions. Source: Bscscan.com
Since BNB is also the original token for the Binance Smart Chain blockchain, increased user activity has a positive effect on the value of BNB, which contributes to recovery.
Traders were willing to buy fall
A trader under a pseudonym known as Altcoin Psycho stated that traders are willing to buy a dip in the altcoin market.
Traders were willing to buy deep. Throughout the week I had expected the market to go down, but I got lazy and did a bad job of positioning myself for success. There have been over 10 edits on my list, I’m just betting on that. Luckily we saw a little dip tonight, but we are still abusing the opportunity. Good lesson here. ”
The rapid capital inflow to the all-currency market shortly after the downturn led to a rapid recovery in several altcoins, which are likely to act as a catalyst for BNB’s growth.