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Potential for BNB Price Recovery: Factors to Consider

Posted on by CryptoCoinstart News Report
Potential for BNB Price Recovery: Factors to Consider
06
Jul
Potential for BNB Price Recovery

BNB Price Analysis: Recent Declines and Potential Recovery

BNB’s price plummeted by 10.11%, accompanied by significant declines in on-chain activity. Here’s a detailed look at what transpired:

Recent Price Movements

Technical analysis revealed that BNB bulls effectively defended crucial support levels amidst a sharp decline in price. Just a month after reaching its all-time high of $720.67, Binance Coin (BNB) experienced a notable 10.11% drop between July 4 and July 5.

Despite a bearish trend earlier in the month, the severity of this correction caught many holders by surprise. According to AMBCrypto’s analysis, the downturn was exacerbated by substantial sell-offs in the market.

Impact of Reduced User Activity

One contributing factor to the decline in BNB’s price has been a noticeable decrease in on-chain activity. Data from DappRadar highlighted a 9.14% decrease in Total Unique Active Wallets (UAWs) on the BNB Chain over the past week.

  • UAWs are a key metric in measuring user engagement and activity within a blockchain ecosystem.
  • A decline in UAWs suggests reduced demand and interaction with the BNB coin.
  • This trend can lead to price consolidation or further declines, as seen recently.

Impact of Total Value Locked (TVL)

Another critical indicator, Total Value Locked (TVL), also declined sharply. TVL represents the total value of assets locked within a blockchain protocol.

Over the past 30 days, the TVL on BNB Chain, which exceeded $5 billion previously, has fallen significantly, indicating decreased participation in activities like token exchanges and staking.

Technical Analysis and Price Outlook

Despite recent setbacks, technical indicators suggest a potential recovery for BNB:

  • On the 4-hour chart, BNB bulls successfully defended the support level at $469.60, prompting a bounce back in price.
  • Currently trading at $479.90, BNB is approaching the $500 mark, a crucial resistance level.
  • The Relative Strength Index (RSI) and Money Flow Index (MFI) both indicate improving sentiment and potential re-accumulation.

If BNB manages to surpass $500, it could target a retest of $526.90, although reaching its previous all-time high remains uncertain.

Despite bullish signals, factors like reduced on-chain activity and declining TVL could continue to weigh on BNB’s price in the near term.

CryptoCoinstart News Report