BNB has surged to today’s new all-time high, with new bullish sentiment and fresh capital inflows driven by inflows into risky assets amid the weakening of the US dollar.
However, beneath the surface, on-chain data shows a different story. User activity in the BNB chain has been steadily decreasing since late September, indicating that users’ demand for the network is weakening even as prices rise. What does this mean?
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BNB’s Bull Run is at risk
BNB prices have skyrocketed 25% in the past week, making it the best-performing asset of the top five cryptocurrencies due to market capitalization. This double-digit rally pushed the token to a new all-time high of $1,263, reaching early today.
But there’s a catch. On-chain data reveals that while BNB prices are rising sharply, user activity on the BNB chain is facing downwards.
GlassNode’s data, for example, shows that the daily new address count for the BNB chain has fallen 57% since September 24th, indicating that network growth is slowing sharply.
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A decline in new addresses in the network indicates weaker demand and reduced user participation. Typically, new addresses will rise with healthy market prices as more users join.
Thus, the divergences mentioned in BNB cases indicate that prices are not caused by new demand for coins or increased network activity. This risks a short-term pullback.
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BNB Bulls are losing steam
Furthermore, measurements from the BNB relative strength index (RSI) suggest potential buyer fatigue, which could lead to price corrections in the short term. At the time of the press, this momentum was 75.79, indicating that Altcoin could be over-acquired and its upward momentum could soon fade.
The RSI indicator tracks the market conditions for asset acquisitions and overselling. It ranges from 0 to 100, with values above 70 suggesting that the asset is being bought and paid for a price drop. Conversely, values under the age of 30 indicate that your assets are selling too much and you may be able to witness a rebound.
At 75.79, BNB’s RSI shows it is becoming a massive over-acquired. Pullbacks are inevitable in the short term, as there is no real demand for support for the rally.
BNB faces a $1,100 test
Without a rebound of network activity to validate BNB price action, its price could be immersed in $1,100. If this important support floor is not retained, the coin’s price could drop to an additional $971.80.
However, if Macro Momentum strengthens demand for BNB or increases actual demand for BNB, its prices could potentially register a new price peak in the next few trading sessions.
