BNB Weekly Active Addresses Surge Over 6% – Is A Rally On The Way?
September 10 2024 - 7:00PM
NEWSBTC
Since March, the price of BNB, previously also known as Binance
Coin, has barely fallen below $500, despite the broader crypto
market downturn. Following heavy losses from major
cryptocurrencies, BNB has shown some impressive resistance to the
price drop, supported by strong demand. Related Reading: Vitalik
Buterin Withdraws 760 ETH As Market Turmoil Strikes Ethereum
Despite this strength, the latest BNB price forecast by CoinCodex
still estimates the coin could rise by 25% and reach $650 by
October 10, 2024. Meanwhile, investor sentiment is bearish, and the
Fear & Greed Index also stands at 33, reflecting that
uncertainty in the market. This mixed outlook brings up questions
about BNB’s near-term trajectory. While there might be a
possibility of growth in the long run, short-term conservatism is
required, more so from the recent coin volatility and broader
market dynamics. BNB’s Sideways Movement And Strong Demand Since
March, BNB has moved within a sideways pattern that posts heavy ups
and downs. However, after every fall, BNB has strongly rebounded
above $500, meaning that there is strong demand for the coin. For
instance, on September 6, it fell as low as $470 but later
rebounded to trade at $520 at press time. This is also in line with
the rising expectations of an altseason, as a decline in Bitcoin
dominance tends to boost altcoins like BNB. Investors seem
confident that BNB might continue profiting from this trend in a
way that it always has historically when stronger demand for
alternative cryptocurrencies was triggered. On-Chain Data: Activity
And Network Demand Recent on-chain data from Dune Analytics points
to both some promising and concerning trends in BNB. The number of
active addresses on the Binance Smart Chain increased by 6%
week-over-week, indicating that more people are interested in
getting on the network. This increase in active addresses did not,
however, reflect a similar uptick in transaction volumes, which
declined 1.1% over the week, hinting that increased participation
has not yet translated into strong network activity. The decline in
network fees also reflects reduced activity, which may have an
effect on the path that the BNB price may take. To be sure, high
network usage has always seen relatively high demand for the BNB
historically, and its prolonged depressed activity can cap the
upside potential of the coin. A Rally Around The Corner? Some
analysts think it could be set up for a run, despite the bearish
sentiment and recent price swings, particularly once altseason
starts to heat up. Usually, when Bitcoin dominance weakens, that
allows other assets to capture market attention and capital, which
is where altcoins, especially BNB, tend to do well. While the
projection for a 25% gain in price by CoinCodex could be the sort
of thing that might suggest that BNB will continue to rise, the
short-term prospects for the token remain uncertain. Related
Reading: Ether Liquidity Plummets 40% On Exchanges After ETF Debut
While the coin did manage to post green days of 47% over the last
month, the price volatility of 4.62% still showed risks. The
bearish sentiment and market fear, along with mixed network
activity, all imply prudence by investors in the immediate future.
BNB may very well persist with its resilience and probably grow
even more. This crypto asset is one to keep an eye on. But with
mixed signals in on-chain data and markets feeling their way
cautiously, the risks involved should be considered first before
investors dabble into the digital asset. While a rally is most
definitely possible, the market has not ended fluctuations just
yet, and that short-term volatility may still be an issue. Featured
image from Zipmex, chart from TradingView
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