Warning Signs Emerge as BNB Hits Record Highs While User Activity Plunges
BNB has surged to a brand new all-time high in the present day, fueled by renewed bullish sentiment and contemporary capital inflows into danger property amid a weakening US greenback.
However, beneath the floor, on-chain information tells a special story. User exercise on the BNB Chain has been on a gentle decline since late September, signaling that the person demand on the community is weakening even as costs soar. What does this imply?
BNB’s Bull Run Faces Risk
BNB’s worth has surged 25% over the previous week, making it the best-performing asset among the many prime 5 cryptocurrencies by market capitalization. This double-digit rally pushed the token to a brand new all-time high of $1,263, the place it reached earlier in the present day.
However, there’s a catch. On-chain information reveals that whereas BNB’s worth has climbed sharply, person exercise on the BNB Chain has been trending downward.
For instance, Glassnode information reveals that the BNB Chain’s every day new handle rely has declined by 57% since September 24, marking a pointy slowdown in community development.
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A drop in a community’s new handle rely alerts weakening demand and decrease person participation. New addresses sometimes rise alongside worth in wholesome market rallies as extra customers take part.
Therefore, the divergence famous in BNB’s case alerts that the value surge just isn’t pushed by new demand for the coin or an uptick in community exercise. This places it at risk of a pullback within the close to time period.
BNB Bulls Are Losing Steam
Furthermore, readings from BNB’s Relative Strength Index (RSI) trace at potential patrons’ exhaustion, which may set off a worth correction within the close to time period. At press time, this momentum is at 75.79, signaling that the altcoin is overbought, and its upward momentum may quickly fade.
The RSI indicator tracks an asset’s overbought and oversold market circumstances. It ranges between 0 and 100, with values above 70 suggesting that the asset is overbought and due for a worth decline. Conversely, values underneath 30 point out that the asset is oversold and will witness a rebound.
At 75.79, BNB’s RSI alerts that it’s turning into considerably overbought. With no actual demand backing the rally, a pullback is inevitable within the close to time period.
BNB Faces $1,100 Test
Without a rebound in community exercise to validate BNB’s worth motion, its worth may dip towards $1,100. If this crucial assist flooring fails to carry, the coin’s worth may fall additional to $971.80.
However, if macro momentum strengthens or precise demand for BNB soars, its worth may register a new price peak over the subsequent few buying and selling classes.
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