BNB Experiences Downturn After Record High Amid Binance Regulatory Challenges
Summary:
Following a six-day surge, BNB (BNB) is experiencing a downturn. After reaching a historical high of $725 on June 6, BNB's value has declined to around $643, marking a 5% decrease in the last day, according to CoinMarketCap. BNB's bullish performance over the past month could be interrupted by profit-booking, leading to further potential dips. The regulatory challenges faced by Binance in the US and Nigeria are ostensibly impacting its market share, with a steady decrease in trading volume being recorded. From a technical standpoint, recent losses in BNB have debunked the breakout from an ascending triangle pattern, suggesting further price corrections in the near future.
The value of BNB (BNB) is experiencing a downturn, having come off the back of a six-day stretch of growth. It had reached a monumental high of $725 on June 6th, but has since slid down to a low point of $635 within one day. The current price is sitting around $643, a 5% decrease in the last day, based on the data from CoinMarketCap.
In the past month, BNB has established a bullish trend, with a 10% gain in the last month and 25% increase in June alone, culminating in the high of $725 on June 6, a peak not seen since November 2021. However, due to cashing in profits from this recent rally, the price is now falling, and further declines may be on the horizon.
Even with obstacles created by regulatory pressures, the Binance brand has held steady, which is reflected in the BNB Smart Chain's (BSC) increasing activity recently. This spike in activity followed a boom in BNB's price, resulting in further user interaction on the network and an upward momentum.
However, data sourced from DefiLlama indicates a drop in the total value locked (TVL) on the network, which appears instigated by an 11% dip in BNB from its highest level. The recorded decrease of 6.8% in TVL within the period of June 6 and June 10 suggests reduced interaction with the network by both developers and users.
Despite BNB Chain's continued strong presence among layer 1 blockchains, data revealed by DappRaddar suggests a 21% fall in transaction volume over the past 30 days, down to 9.9 million. Unique Active Wallets (UAW), a metric representing individual crypto wallet addresses that interact with a blockchain's smart contracts, indicates that BNB Chain continues to fall behind Ethereum, with 1.46 million UAWs recorded, a 14% decrease over the last month.
Mounting regulatory challenges in the United States and Nigeria are contributing factors to the perceived loss in market share for the Binance crypto exchange, following legal issues in 2022 that led to the incarceration of former Binance CEO Changpeng Zhao and prosecution of one of its executives in Nigeria. Subsequently, Binance's trading volume market share appears to be shrinking, with data from CCData indicating a drop of 17.3%, down to $1.68 trillion in May. CoinGecko further supports this with a decrease in daily trading volume on the Binance crypto exchange of over 83%, falling from $61.05 billion on March 15 to $10 billion on June 10.
From a technical perspective, today’s decline in BNB undermines the breakout from the ascending triangle pattern, seemingly initiated by profit taking from its recent unprecedented high. If the current support line of $633 is broken, the value of the layer 1 token may fall towards the pattern’s ascending trendline at $600—a potential drop of around 7.6%. The sharp decrease in BNB's daily relative strength index (RSI) from an overbought level of 80 to a current level of 55 also signals that further price corrections could be anticipated.
Please note, this report does not constitute investment advice or recommendations. All investments and trading decisions carry risk, and individuals should conduct independent research prior to making any decisions.
Published At
6/10/2024 8:15:20 PM
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