CoinDesk Report:
BNB Price Plummets 10.11%, On-Chain Activity Significantly Declines; Technical Analysis Shows Strong Bullish Defense of Support
Less than a month after hitting a historic high of $720.67, Binance Coin (BNB) has once again seen a drop in price. This decline includes a 10.11% decrease between July 4 and 5.
While the coin’s price has been bearish since early this month, few holders anticipated such a significant pullback in such a short period. According to AMBCrypto’s analysis, the cryptocurrency’s value plummeted due to substantial selling pressure in the market.
Low user activity contributes to decreased BNB demand
However, there are other contributing factors. Firstly, on-chain activity has notably decreased. Evidence of this decline was identified after examining data from DappRadar.
DappRadar, an analytics platform, provides real-time insights into on-chain activities. According to their data, over the past seven days, the total number of Unique Active Wallets (UAW) on the BNB blockchain has fallen by 9.14%.
In cryptocurrencies, UAW measures user engagement and activity on the blockchain. An increase in this metric indicates heightened interaction and usage of the coin. Conversely, a decrease suggests low demand within the ecosystem, potentially leading to consolidation or, as recently observed with BNB, price declines.
Another factor contributing to the coin’s decline is Total Value Locked (TVL), which represents the value of assets locked in blockchain protocols.
An increase in TVL signifies that market participants are depositing more assets into off-chain protocols. However, at the time of writing, the TVL, which exceeded $5 billion 30 days ago, has fallen below that threshold.
Aside from interactions with BNB itself, this decline also indicates that activities such as token exchanges and betting have not yet reached previous peak levels.
Altcoin eyes a return to $526
If this trend continues, BNB’s price could potentially decrease further. Based on the 4-hour chart, BNB bulls appear to have defended the $469.60 support, resulting in a rebound from the lows.
At the time of publication, the altcoin is trading at $479.90, poised to retest the $500 mark soon. It’s noteworthy that the Relative Strength Index (RSI), which previously reached oversold levels when it dropped below 30.00, is now rising. This suggests that momentum is leaving the bearish zone. If this trend persists, BNB’s price could rise again and maintain above $500.
The Money Flow Index (MFI) is also showing signs of accumulation. Once breaking through $500, BNB may attempt to reach $526.90.
Regardless of bullish potential, however, BNB’s value may not approach its historical highs.