BNB Chain Sees Recovery as Network Activity Grows

BNB Chain Sees Recovery as Network Activity Grows

BNB, the native token of BNB Chain, is experiencing a recovery backed by increasing network activity and a surge in DApp usage.

BNB, the native token of BNB Chain, has begun a recovery after experiencing a recent dip in value. The ongoing recovery is fueled by increasing network activity and the of new Binance launchpad products. While BNB still faces challenges, its performance in terms of DApp volumes and active unique addresses shows promise for the future.

New Binance launchpad product and a surge in DApp activity:

One of the factors contributing to the value of BNB is the reduced trading fees and exclusive launchpad offers and services provided by Binance. The recent launch of a “dual investment” product from Binance is expected to boost BNB’s volumes, which have already exceeded $998 million in the past 24 hours.

To assess the health of the blockchain ecosystem, it is important to compare BNB Chain’s performance against other competing chains. While Ethereum and its layer-2 scaling solutions dominate in terms of DApp volumes, accumulating over $31.73 billion in the past seven days, BNB Chain has also seen significant growth. BNB Chain amassed $3.82 billion in DApp volumes, with its NFT volume experiencing an 11% surge to reach $864.93 million. Additionally, BNB Chain leads in terms of active unique addresses (UAW), with 2 million UAWs compared to Ethereum’s 359,380.

Growing transaction volume and increasing total value locked (TVL) on BNB Chain:

The growth in the number of addresses engaging with DApps on BNB Chain, along with the increasing transaction volume, has contributed to the rise in total value locked (TVL). Data from DefiLlama shows that BNB Chain’s TVL steadily increased from mid-December 2023, reaching a peak of $3.73 billion on Jan. 18. Although the metric experienced a slight decline in the past few days, it began picking up again on Jan. 25, indicating a growing trust in the blockchain among users.

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BNB’s bull flag and potential for an uptrend:

Despite experiencing a correction after reaching an eight-month high of $340 on Dec. 28, 2023, BNB’s daily chart reveals the presence of a bull flag pattern, suggesting a continuation of the uptrend. BNB bulls face resistance at the flag’s upper boundary of $316, but a daily candlestick close above this level could signal a possible breakout and project an uptick to $450, representing a 48% ascent from the current price.

The 50-day exponential moving average (EMA), 100-day EMA, 200-day EMA, and the relative strength index (RSI) all indicate an upward trend, favoring the bulls. The increase in price strength from 40 to 50 suggests that buyers are taking advantage of dips in the market. However, bears may try to pull the price lower, with support levels at $282, $271 (100-day EMA), and $250.

Conclusion:

Despite recent challenges, BNB Chain is showing signs of recovery and growth. The increasing network activity, surge in DApp usage, and growing total value locked demonstrate the potential for BNB to regain its strength. The presence of a bull flag pattern on the daily chart further suggests a possible uptrend in the near future. Investors should conduct their own research and exercise caution when making investment decisions.