What’s Fueling the Bullish Surge as BNB Reaches a 2-Year Peak?

BNB Price Surge: A 2-Year High and the Driving Forces

BNB (BNB) price experienced a remarkable 62% surge within 30 days, reaching its highest level in 2 years on March 8 at $489.50. While this surge may have been influenced by broader market gains, it solidified BNB as the third-largest cryptocurrency by market capitalization, excluding stablecoins. Traders are now questioning whether BNB can sustain its rally, especially with expectations of the price breaking above $500.

Binance and CZ’s Influence on BNB Price

Many investors were skeptical about BNB’s ability to reclaim current levels, particularly after Binance’s founder and former CEO Changpeng “CZ” Zhao entered a plea deal with the United States federal court in November 2023. This deal was related to allegations of allowing exchange users involved in illicit activities to transfer “stolen funds” through the platform. CZ’s agreement to step down as CEO cast doubt on the future of the BNB token, given its reliance on the Binance exchange ecosystem.

CZ’s trial is pending sentencing, but the settlement between Binance and the U.S. Commodity Futures Trading Commission (CFTC) in December 2023 helped alleviate uncertainty about BNB’s future. Binance was mandated to implement a formalized corporate governance structure, including compliance and audit committees. Meanwhile, CZ was ordered to remain in the U.S. until his sentencing date.

As cryptocurrency volumes surged to their highest levels in 12 months, some major exchanges, including Coinbase, experienced multiple outages. Crypto investor @Rampage_Calls criticized Coinbase’s frequent outages on social media, while Binance trading reportedly remained unaffected.

Comparing Binance and Coinbase

In a way, part of Binance’s success in leading spot and derivatives trading volumes stems from its robust trading engine and servers when compared to Coinbase. This movement encourages users to buy in, aiming to benefit from reduced trading fees and the ability to participate in the exchange’s token launch platform.

BNB Rally and BNB Chain Activity

However, a significant aspect of BNB’s utility comes from the BNB Chain. Analyzing the network activity, the network’s smart contract deposits, measured by the total value locked (TVL), decreased by 7% in the past 30 days in BNB terms.

Data reveals that 12.8 million BNB has been deposited in BNB Chain’s decentralized applications (DApps), significantly lower than the 19.4 million recorded in early 2023. For comparison, Ethereum network TVL increased by 3% in ETH terms over the past 30 days, while Solana experienced a 20% TVL gain in the same period.

One could argue that certain DApps, such as NFT marketplaces and decentralized finance (DeFi) aggregators, do not necessitate large deposit sums. Therefore, measuring volume activity provides a better gauge of network use.

The recent rally in BNB’s price appears justified by BNB Chain’s 41% DApp volume gains in the past 30 days, and, notably, its third-place ranking overall. Furthermore, BNB Chain stands out when analyzing the number of active addresses engaging with its DApps, reaching a remarkable 5.6 million.

Conclusion and Disclaimer

A more thorough analysis of the quality of BNB Chain’s activity and the potential impact on the Binance exchange after CZ’s trial is necessary to determine whether BNB is poised to reclaim the $500 level. Nonetheless, the initial data seems bullish.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.