BNB Soars to $600: Can It Climb Higher?

BNB Price Performance Overview

On September 27, BNB (BNB), the native token of the BNB Chain, surged to $614, marking a 25.7% gain over the past three weeks. This is the first time BNB has closed above this level since June 2024, igniting speculation that bullish momentum could continue. Some market participants speculate that this rally is linked to the release of Binance founder Changpeng “CZ” Zhao from U.S. custody after four months of detention.

Analyzing the Rally: Market Sentiment vs. CZ’s Release

Despite the timing of CZ’s release, BNB’s performance appears to closely mirror the broader altcoin market trends. Therefore, many analysts argue that the rally cannot solely be attributed to CZ’s return. Some technical analysts believe that BNB’s recent resilience, which prevented it from dropping below $500, suggests that the bullish trend may just be beginning, with some targeting a price of $1,000.

Background on CZ’s Legal Issues

In April, former Binance CEO CZ pleaded guilty to a felony charge related to violations of the Bank Secrecy Act. As part of his plea deal, he paid a $150 million penalty and agreed to step down permanently from exchange management, receiving a four-month jail sentence. In November 2023, Binance reached a $4.3 billion settlement with U.S. regulators. CZ acknowledged Binance’s operational mistakes but maintained that user funds were not misappropriated.

Is CZ’s Release Driving BNB Price?

Although CZ’s legal troubles may have drawn attention, they likely do not directly influence BNB’s price movements. Instead, BNB’s value is primarily tied to the Binance ecosystem, including:

• Launchpad incentives
• Trading fee discounts
• Activity within BNB Chain’s decentralized applications (DApps)

Evaluating BNB’s Path to All-Time Highs

To determine if BNB can reclaim its all-time high of $724 set on June 6, it is crucial to assess the demand for BNB within its ecosystem. Additionally, the sustainability of BNB’s recent rally should be compared to the performance of rival blockchains such as Ethereum (ETH) and Solana (SOL).

Total Value Locked (TVL) and DApp Activity

The total value locked (TVL) is a critical metric for tracking the deposits secured in a network’s smart contracts. For the BNB Chain, the TVL has remained stagnant at around 8.2 million BNB over the past two months, according to DefiLlama data. In comparison:

• Ethereum’s TVL increased by 8% to 19.2 million ETH.
• Solana’s TVL surged by 20% to 35.7 million SOL.

In terms of DApp volumes, BNB Chain experienced a 35% decline, totaling $26.7 billion in activity over the past 30 days, according to DappRadar. This trend aligns closely with Ethereum, which saw a 36% drop to $129.1 billion during the same timeframe.

Active Users: A Mixed Picture

Despite the declining volumes, the number of active addresses on BNB Chain interacting with DApps increased by 4% over the past month, reaching 2.47 million. In contrast:

• Ethereum saw a 23% decline in active addresses, dropping to 1.51 million.
• Avalanche’s active addresses rose by 1% to 57,870.
• Polygon experienced a 17% decrease in active users.

Conclusion: The Future of BNB

Given the current trends, there has been no significant development in the BNB Chain ecosystem that would warrant BNB outperforming the broader altcoin market. Furthermore, there is no evidence to suggest that CZ’s release is directly driving the price surge. Consequently, expectations for BNB to reclaim its all-time high in the near term seem unrealistic.