Binance Coin Up 20% on DeFi IEO Hype; Pullback Ahead?

  • Binance's domestic token BNB rose more than 20 percent after its CEO Changpeng Zhao announced its plans to launch an internal decentralized financial product.
  • The BNB / USD exchange rate on Sunday reached its previous high of USD 22.94.
  • According to many crypto analysts, the company is now looking to expand its upward momentum to $ 27.

BNB, the native token of the world's leading cryptocurrency exchange Binance, has risen by more than 20 percent after July 24, 2020.

It's the same day that Binance's CEO, Changpeng Zhao, announced that they would launch an initial round of exchanges to fund their upcoming decentralized finance project. With an initial exchange offering (or IEO), startups can raise money by selling their utility / security tokens on an exchange.

In the meantime, decentralized financing (or DeFi) is restoring traditional financial instruments such as loans and equity investments in a distributed architecture.

DeFi Craze

Mr. Zhao's statement appeared at the time when tokens supported by a variety of DeFi projects saw amazing price gains. At Chainlink, a decentralized Oracle network, for example, the native LINK asset rose by more than 80 percent in the current quarter.

The announcement also surfaced almost a week after Binance's 12th Token Burn event. On July 20, the stock exchange destroyed 3,477,388 BNBs, which was equivalent to $ 60.5 million at that time, thereby permanently removing it from circulation.

This also increased the optimistic outlook of the BNB due to the classic dynamic of demand and supply.

Between July 20 and this time, the BNB / USD exchange rate increased by around 25 percent.

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BNB is trading 62 percent higher YTD on Monday. Source: TradingView.com

The pair's upward trend also led to key technical resistance, as shown by a red descending trend line in the graph above. The falling slope prevented the BNB from establishing a full-scale eruption to the north. But now that it's broken, the cryptocurrency's ability to continue its bull run has increased.

At least that's what hardcore BNB dealers say. One of them indicated that the BNB could expand its upward trend to $ 25, a level it last tested in August 2020. The others even forecast the cryptocurrency to its all-time high of $ 43.

Their reasons were clear: a DeFi IEO in combination with the token burn events should bring the BNB to a higher price level.

“It is time for FOMO within 7 days $ BNB if you haven't already, "said a trader on August 1st." New DeFi IEO + Launchpad 2.0. Add in the bullish market on the largest stock exchange and it doesn't require a lot of math. The number of exchange tokens is increasing. "

Retreat ahead

Binance coin on a technical edge known as the Relative Strength Index (RSI) is overbought. Assets whose RSI values ​​are above 70 tend to correct lower to neutralize their general mood.

Therefore, the BNB is likely to face higher selling pressure near normal resistance levels starting at $ 23.85. If the price moves above this level, the asset would be subject to a similar correction pressure of $ 27.51.





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