The chain is experiencing growth in transactions but it may not be the same for the coin price.
- The increase showed that attention was shifting back to the chain. BNB’s price might fall to $580 despite the rise in TVL.
For the first time since the 2nd of May, BNB Chain’s DEX trading volume climbed higher than $700 million. This was according to Artemis data.
For context, DEX is a short form for Decentralized Exchange. Artemis, on the other hand, is an analytics platform for crypto metrics.
Has a new race begun?
Before now, the DEX volume on the blockchain has been on a downward slope since mid-April. As such, the value has failed to hit or surpass $1 billion since that period.
However, the recent rise implies a growing user activity on BNB Chain. For those unfamiliar, Binance [BNB] is the cryptocurrency used for transactions on the network.
Therefore, a low DEX volume could imply a decrease in transaction activity on the chain.
Source: Artemis
A higher DEX volume suggests an increase in network participation, indicating an increase in the coin’s demand.
BNB’s price was $593.70 at press time, representing a slight 1.23% increase in the last 24 hours. If the volume on the chain continues to rise, the price action could improve.
But the coin has not experienced significant buying pressure recently. If it does, then a return to $620 might be possible.
In terms of the on-chain volume, AMBCrypto observed that it has been declining since the 10th of May.
BNB’s move may be false
Rising volume and an increasing price indicate that an upswing might continue. However, BNB’s recent price rise, accompanied by the decreasing volume, suggests weakness in the uptrend.
Thus, the BNB might have witnessed a false breakout. If this is the case, a downward move to the $580 support could be next for the cryptocurrency.
Source: Santiment
Another area AMBCrypto analyzed was the Total Value Locked (TVL). TLV is an indicator of the health of a network. With this metric, one can tell if market participants are staking or locking assets on a protocol.
If the TVL increases, it is a sign of perceived trust for a project. In this case, the value of assets locked must have increased in anticipation of better yield.
However, a decreasing TVL suggests that assets are being taken out, and participants do not believe that the protocol involved can produce good rewards.
According to DeFiLlama, Binance Smart Chain’s TVL was $61.2 billion. A thorough look at the protocols under the chain showed notable increases within the past week.
Source: DeFiLlama
Hence, this rise across the board implies that participants are confident in the chain’s health and security. However, the metric remains far below the peak it hit in 2021.
Realistic or not, here’s BNB’s market cap in BTC terms
Should the TVL continue to increase, BNB’s price might also follow, However, the possible prediction of $1,000 might only happen if the metric rises past $10 billion for a start.
If not, that forecast might not come to pass. Still, it is important to remember that other factors might influence the price apart from this.
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