BNB Outperforms Bitcoin and Ether following Ethena Launch and Market Dominance Surge
Summary:
BNB's value has seen a 4% increase to $584, surpassing its counterparts Bitcoin (BTC) and Ether (ETH). This surge is primarily due to the launch of synthetic dollar protocol, Ethena (ENA), and a rise in BNB's market dominance. The addition of Ethena to the Binance Launchpool on March 29 led to an increase in the total-value-locked (TVL) across the BNB Chain. Furthermore, the BNB Chain's strategic move into the memecoin market has also contributed to the increase in BNB's price. The price of BNB is expected to rise towards the $950 mark by June.
The value of BNB (BNB) has increased by 4% to $584, outdoing its market counterparts, Bitcoin (BTC) and Ether (ETH), which saw smaller gains of 0.64% and 0.22% respectively. The price increase of BNB on April 4 is largely due to the enthusiastic response to the launch of the synthetic dollar protocol, Ethena (ENA), and an increase in BNB's dominance in the cryptocurrency market.
Binance revealed on March 29 that Ethena was included into the Binance Launchpool, allowing users to stake their BNB (and FDUSD) tokens in exchange for ENA tokens from March 30 until April 1. ENA tokens were listed for trading on April 2. During this period, the total-value-locked (TVL) in the BNB Chain had a modest increase, as seen in the Defi Llama chart. The staking of BNB tokens for ENA tokens led to an uptick in buying and holding activities, causing the price of BNB to rise. Similar increases happened around the time of the Portal (PORTAL) gaming platform's inclusion into Binance Launchpool in February.
There has been a noticeable growth in BNB's share in the cryptocurrency market, coinciding with excitement surrounding Ethena, pointing to an increase in the amount of capital being invested into BNB compared to other digital assets. The BNB Dominance Index (BNB.D) climbed about 6.5% from its lowest point on April 2. The latest surge in BNB's market dominance is reflective of the significant expansion seen in other major altcoins like Solana and Ether, predominantly against Bitcoin, which holds nearly half of the market's total value. For instance, BNB/BTC has surged by 7.6% since April 2, hitting a two-week high of 0.00887 BTC on April 4.
Moreover, BNB's price increase can also be attributed to the BNB Chain's strategic move into the memecoin market. This could be a response to the quick network expansion noticed in its competitor, Solana, within the same market. As part of their expansion strategy, BNB Chain has offered up to a million dollars in rewards to developers who launch their memecoin projects on its network. Since this announcement on April 2, BNB's price has climbed a further 2%. Such strategic investments may likely increase the utility and demand for BNB in areas such as transaction fees, governance, and new projects within the BNB Chain network.
Today's surge in BNB's price follows a bounce back move that started after hitting the lower trendline of its existing bull pennant pricing pattern. The price of BNB is expected to rise towards the pennant's upper trendline in the coming days, with chances of breakout towards the $950 mark, a 65% increase from the current price, by June.
However, a significant drop below its lower trendline could invalidate its bullish trend, shifting focus towards its 50-day and 20-day exponential moving averages (EMAs) of $500 and $360 respectively, which could act as strong support zones.
Investors are urged to do their own research before making any investment or trading decisions, as all investments come with risks.
Published At
4/4/2024 2:23:10 PM
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