Despite recent developments in network activity, Binance Coin (BNB) has shown slower growth compared to other top cryptocurrencies by market cap. While it recorded a gain of 29.65% over the past month, this performance falls short when contrasted with that of other leading digital assets.
On a daily basis, BNB has experienced a decline of 4.85%, indicating potential vulnerabilities in its market position.
Although current growth may seem lackluster, an analysis conducted by CryptoCrypto suggests that BNB still has room to expand further, with expectations of continuous price appreciation.
Discrepancy in network activity despite growth
Recent data from Glassnode reveals a surge in the number of active addresses on the Binance Smart Chain (BSC), reaching 751,000. This increase hints at the potential for further movement in asset prices.
Active addresses serve as a metric to gauge the number of participants involved in various transactions on the BSC, including buying, selling, and other related activities.
Glassnode has highlighted the encouraging nature of this growth, stating:
“It reflects an expansion in on-chain activities, stronger fundamentals, and a growing network utilization.”
While the rise in activity indicates a demand for BNB, the native token of the blockchain, and could potentially lead to a price hike, the ongoing rally is not yet complete based on past trends.
During the bull market of 2021, BNB Chain reached a peak of about 1.5 million active addresses.
Should the current market follow a similar trajectory, BNB stands to possibly witness a 100% increase in price from its current levels, as indicated by the gap between milestones of active addresses.
Possible Supply Tightness for BNB on the Horizon?
There are signs pointing towards a looming supply squeeze for BNB—a scenario where escalating demand meets a diminishing supply of the asset, resulting in upward price pressure.
Presently, there has been a notable negative netflow of BNB on exchanges. Over the last 24 hours, the netflow stands at negative $729,340, with the 7-day figure at negative $1,850,000.
This trend suggests more BNB is exiting exchanges than entering, thereby reducing the available supply.
If this pattern persists, the diminishing supply of BNB on exchanges alongside rising demand could trigger a significant price surge for the asset.
Supportive Indicators for a Bullish Trend
BNB’s funding rate has displayed noticeable growth in recent days, indicating the potential for an upcoming market upswing.
Currently, the funding rate is at 0.0650%, a positive figure suggesting that long traders are actively upholding the market by intermittently funding it to maintain price stability.
Furthermore, the OI-weighted funding rate, which integrates funding rates with open interest to evaluate market sentiment and leverage, remains in the positive zone and is on the rise. This implies a high probability of an upward price movement for BNB.
With multiple factors aligning—increasing active addresses, historical trends, and derivative metrics—BNB appears poised for a potential price upsurge.