BNB’s bull flag and blockchain DApp activity hints at price recovery
BNB (BNB), the parent of the BNB chain, began a recovery on January 26, rising 3% to return to the $300 level. Although BNB is weak, its continued recovery is supported by increasing network activity.
New Binance launch pad product and DApp activity increase
A significant part of the value of the BNB token comes from reduced trading fees and special launchpad offers and services from Binance.
The recent “double investment” from Binance's product may increase BNB volumes, which have exceeded $998 million in the last 24 hours.
One way to determine the health of a blockchain ecosystem is to compare how the network is performing against competing chains.
Note that Ethereum and Layer-2 scaling solutions remain unchallenged in terms of DApp volumes, accumulating more than $31.73 billion in the past seven days, and Ethereum's non-vulnerable token (NFT) volume is at $226 million. In contrast, BNB Chain collected $3.82 billion in DApp volumes, while NFT volume increased by 11% to $864.93 million over the same period.
However, when measured for Unique Active Addresses (UAW), BNB Chain leads the way, with 2 million UAWs compared to Ethereum's 359,380.
Related: Price Analysis 1/24: BTC, ETH, BNB, SOL, XRP, ADA, AVAX, DOGE, DOT, LINK
Relatively speaking, BNB Chain's 6.4% growth in the number of addresses connecting to DApps in seven days and the growing transaction volume can explain the increasing Total Value Locked (TVL).
According to Defillama data, BNB Chain TVL has steadily increased since mid-December 2023, when its value began to rise to $3.73 billion on January 18. Although this measure has decreased slightly over the past few days, on January 25, it indicates an increase in user confidence in the blockchain.
Is BNB's Bull Flag a Sign of Things to Come?
After reaching an eight-month high of $340 on December 28, 2023, BNB prices recovered as sellers booked profits and the broader crypto market corrected.
Despite the correction, a bull flag can be seen on the daily chart, suggesting a continuation of the uptrend.
BNB bulls face resistance from the flag's upper border at $316. A daily candlestick above this level indicates a possible breakout from the chart's formation, which will rise to $450. Such a move represents a departure of 48% from the current price.
The 50-day Exponential Moving Average (EMA), 100-day EMA, 200-day EMA and Relative Strength Index (RSI) are all looking up, suggesting that the market is still bullish. From 40 to 50 price strength, the bulls were buying on the dips.
On the other hand, the bears can lower the price from the lower limit of the flag at $282, which provides the first line of defense. Additional support lines are likely to emerge from the 100-day EMA at $271 and the major support level at $250.
This article does not contain investment advice or recommendations. Every investment and business activity involves risk, and readers should do their own research when making a decision.
