Binance Coin: Will declining network activity hinder BNB’s rebound?
BNB's price rebound could be heavily dependent on a rise in network activity for BNB Chain.
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.
- BNB prices remained stuck between the $205 to $225 price level.
- Declining network activity contributed to a lack of price momentum for BNB.
Binance Coin [BNB] extended its sideways price action, as the BNB Chain continued to battle declining network metrics. A recent price report highlighted the tendency for BNB to fall into a range-bound movement, if price gets rejected at $225.
Read Binance Coin’s [BNB] Price Prediction 2023-24
This played out perfectly over the past week, as bears stood their ground at the resistance level to keep prices under the $225 level. Binance Coin’s price action continued to mirror Bitcoin’s [BTC] as the kingcoin struggled to break above the $26k price level.
Inconsistent trading volume continued to limit BNB’s price action
The On Balance Volume (OBV) indicator highlighted the wavering nature of BNB’s trading volume over the past months. The OBV registered significant drops in trading volume in early June and late August. This has kept BNB’s price action in a lateral movement, amidst its overall bearish market structure.
Similarly, the Relative Strength Index (RSI) echoed the lack of demand for BNB. Despite a short spike above the neutral 50 on 30 August, the RSI quickly declined under the neutral 50 and remained there, as of press time.
Bulls looking for upward movement would need to rely on Bitcoin breaking above $26k, as this could add some needed bullish activity to the market. Otherwise, bears would be content with this sideways price action while bidding their time to sink BNB to the $200 price level.
Lack of development activity could hamper BNB’s price
BNB as a token is intricately linked to the BNB Chain, as it is the spending currency for on-chain activities. A look at BNB’s development activities on Santiment showed a steep decline, since 21 August.
How much are 1,10,100 BNBs worth today?
A look southward at the development activity showed that BNB’s price peaked earlier in the year when development activity was very high. This was because there was a great demand for BNB to power on-chain activities. The decline in development has negatively impacted BNB due to lesser demand.
Along with the dwindling trading volume, it could take a while before BNB is able to mount a sustained price reversal.
