Binance Coin (BNB) Price Retreats Despite Strong Fundamentals, Technicals Suggest a Potential Rebound

Binance Coin (BNB) dropped to $645.05, down by more than 20% from its highest level in December last year. BNB Chain has strong fundamentals

The price of Binance Coin (BNB) fell sharply in January as the broader altcoin market lost steam and traders remained focused on the upcoming Federal Reserve meeting.

BNB price dropped to $645.05 at the beginning of the week, which is more than 20% below its highest level in December last year. However, the coin outperformed other top coins like XRP, Solana (SOL), and Polygon (MATIC), whose prices crashed by more than 30%.

Strong BNB Chain fundamentals

The BNB price declined even after the network’s fundamentals remained strong in January. According to data by Nansen, the number of addresses on the BNB Chain rose by 40% in the past 30 days, pushing the total to almost 20 million. This makes it the third-biggest chain in this metric after Solana (SOL), Base, and Tron (TRX).

The BNB Chain transactions rose by 3.2% in the last 30 days to reach more than 126 million, a sign that the network is performing well.

Further data showed that the network is also performing well in the decentralized exchange (DEX) sector, where it is closing the gap with Ethereum. According to Footprint Analytics, DEX protocols on BNB Chain processed tokens worth over $24 billion in the past 7 days, while Ethereum processed $19 billion. In the past 30 days, BNB Chain handled $80 billion while Ethereum processed $84 billion.

Another bullish catalyst for the BNB price is the huge number of tokens that are being burned each day and quarter. In the past seven days, BNB incinerated 363 coins, valued at over $236,815, as part of the real-time burn, which sees gas fees in the ecosystem being burned.

The network will also burn 1.6 million BNB tokens, valued at $1.01 billion, this month. These tokens are part of its quarterly auto-burn mechanism, which is determined by the BNB price and the number of coins burned each quarter.

Technicals: BNB price set for a strong rebound?

On the weekly chart, we see that the BNB price is now forming the handle section of a cup and handle pattern. A C&H is a popular pattern that consists of a rounded bottom and a handle, and it is considered to be one of the most bullish in the market.

The BNB price has also remained above the 50-week and 100-week moving averages, a sign that there are bulls in the market.

The depth of the cup is around 78%. Measuring the same distance from the top of the cup gives us a price target of $1,200, which is about 90% higher than the current price. A rebound to that level will probably take time since this pattern has formed on the weekly chart.