BNB rallies to $600 and traders call higher – data supports this view?

BNB (BNB), the native token of the BNB Chain, peaked at $614 on September 27, marking a 25.7% gain in three weeks. This is the first time BNB has closed above this level since June 2024, leading to speculation that the bull run could extend further. However, some market participants protested the release of Binance founder Changpeng “CZ” Zhao from the United States after four months in prison.

As BNB's performance has closely mirrored the broader altcoin market over the past three weeks, there is little support for the theory that the CZ release is leading the rally. However, some technical analysts believe that BNB's recent breakout below $500 indicates that the bullish trend has just begun. In fact, few would argue that $1,000 might be a realistic target for BNB.

In April, the former CEO of Binance, CZ, pleaded guilty to criminal charges related to the violation of the bank's secrecy law, agreed to pay a fine of 150 million dollars and be permanently removed from the management of the exchange. He was sentenced to four months in prison. In November 2023, Binance reached a $4.3 billion settlement with US regulators. CZ acknowledged Binance's mistakes but emphasized that no user funds were misappropriated.

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CZ release probably won't drive BNB price.

Although CZ's legal issues may attract attention, they may be unrelated to BNB's recent price action, given the short-term media coverage associated with CZ's reputation and influence in the crypto community. BNB's value is largely tied to Binance's ecosystem, including launchpad incentives, transaction fee discounts, and decentralized applications (DApps) within the BNB Chain.

To assess whether BNB can recover the all-time high of $724 as of June 6, one must assess the demand for BNB in ​​the ecosystem. Above all, determining the sustainability of BNB's price rally requires comparing the BNB Chain's performance to rival blockchains such as Ethereum (ETH) and Solana (SOL).

Total Value Locked (TVL) is a key metric that tracks the deposits locked in the network's smart contracts, making it an important indicator of blockchain activity. For BNB Chain, TVL has stood at 8.2 million BNB in ​​the past two months, according to Defillama data. In comparison, deposits on the Ethereum network increased by 8% to 19.2 million ETH, while Solana's TVL increased by 20% to 35.7 million SOL during the same period.

In terms of Dapp volumes, BNB Chain has seen a 35% drop, with $26.7 billion in total activity over the past 30 days, according to Dapradar. This trend closely mirrors that of Ethereum, which experienced a 36% decline to $129.1 billion over the same period. Similarly, Avalanche's DApp volume fell by 24%, totaling $1 billion in the 30 days to September 27.

Related: Binance Continues to Serve Russian Users Despite 2023 Exit

BNB chain activity does not stand out from competing blockchains.

Although the size of the BNB Chain is decreasing, this pattern seems to be consistent with the broader cryptocurrency market. However, not all DApps require large transaction amounts or deposits to be successful. Sectors such as non-fungible token (NFT) marketplaces, aggregators, minigames, social networks, prediction platforms, and other Web3 services prioritize user engagement over transaction volume. So the number of active users is another measure of network health.

For BNB Chain, the number of active addresses connecting to DApps increased by 4% over the past 30 days, reaching 2.47 million, according to DappRadar. In contrast, the Ethereum network showed a 23% decrease in active addresses, falling to 1.51 million in the same period. Meanwhile, Avalanche's active addresses rose 1% to 57,870, while Polygon saw a 17% drop in users over the period.

So there was no major development in the BNB Chain ecosystem that ensured BNB outperformed the broader altcoin market. Furthermore, there is no evidence that CZ's release from US custody is causing inflation. As a result, there is little basis to expect BNB to regain its all-time high in the near future.

This article is not intended for general information purposes and should not be construed as legal or investment advice. The views, ideas and opinions expressed herein are solely those of the author and do not necessarily represent the views and opinions of Cointelegraph.