BNB in Negative Correlation With BTC, Analysts Mark $1,000 as Short-term Target

While bitcoin (BTC) has been consolidating over the last few weeks, BNB, the native cryptocurrency of the Binance ecosystem, has been climbing to new highs. Although September is a seasonally weak month for BTC, analysts believe BNB is on track to smash $1,000 and possibly rally to the $1,500 range.

A report by the market intelligence platform CryptoQuant disclosed that a further rally in the price of BNB will be supported by sidelined liquidity in the Binance ecosystem.

BNB Correlation With BTC Weakens

To substantiate its claim, CryptoQuant explained that BNB has been negatively correlated with BTC, reaching a coefficient of -0.27. Amid the growing divergence between the two assets, BNB has been outperforming BTC.

Since reaching a new all-time high (ATH) in mid-August, BTC has been trading sideways. At the time of writing, the leading digital currency was trading around $114,000. BNB, on the other hand, just hit an ATH of $906 about 24 hours before press time. BNB is up over 10% in the past thirty days, but BTC is down 4% within the same timeframe.

September’s negative seasonality is expected to be over in three weeks. Then, the market could move into a historically positive fourth quarter. Analysts expect BTC to appreciate by then and BNB to follow suit. With BNB already on a positive momentum, the asset will have a higher leg up and will likely crush its short-term target of $1,000. 

CryptoQuant analysts believe BNB could reach an ATH within the range of $1,500 before the bull cycle is over this year.

Sidelined Liquidity in Stablecoin Reserves

Notably, sidelined liquidity from Binance’s ERC-20 stablecoin reserves is propelling the surge in BNB price. The exchange’s reserves have risen from an August low of $32 billion to $38 billion currently. This 19% increase reflects a substantial amount of sidelined liquidity, which will act as a catalyst for more gains in the next two quarters.

Meanwhile, the BNB Chain’s auto-burn mechanism has been reducing the total and circulating supply of BNB. According to the laws of supply and demand, such a trend could support greater rallies, especially when demand persists. The automated quarterly burns of BNB have significantly helped the asset’s price appreciation. This feature has given the cryptocurrency an edge over other assets, as they do not have a similar mechanism.