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BNB

Therefore, Binance Chain (BNB) faced an important price test on September 30.

BNB, the native token of Binance’s Binance coin Chain, entered a symmetrical triangle formation when it first encountered the descending trendline at the $335 resistance on August 10.

BNB

A decision on whether to break the symmetrical triangle up or down is expected by September. The latest breakthrough in Binance coin Chain development was announced on September 7 after the project introduced zero-knowledge (ZK) proof-of-scaling privacy technology. Ethereum mastermind Vitalik Buterin also wants to implement a similar solution for the Ethereum network, highlighting the importance of ZK in late 2021.

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Binance coin Chain’s Ethereum-compatible network is fully functional and hosts decentralized applications (DApps), including decentralized exchanges (DEXs), games, collateralized loan services, social networks, yield aggregators, and NFT markets.

A drop in price deposits could be a red flag

Despite being currently 60% below its time high, BNB remains the third largest cryptocurrency by market cap, excluding stablecoins. Although the price of BNB has increased by 26.5% in the last 3 months, the network’s TVL as measured in BNB tokens has fallen by 12.5% over the same period.

bitcoin

In fact, lower smart contract deposits have been the norm across the industry. For example, Solana’s (SOL) TVL decreased by 27.5% in 3 months and Avalanche (AVAX) decreased by 36%. Even Ethereum saw a 29% cut in ETH deposits, down from 34 million on July 17 to 24.2 million.

Gameta-led DApp usage is growing

To confirm whether BNB Chain’s TVL drop is accompanied by a decrease in users, investors should analyze decentralized application (DApp) usage metrics.

 BNB Chain’s decentralized exchange, PancakeSwap, has 1.75 million active addresses and is the absolute leader in all smart contract networks. Meanwhile, the Ethereum network only has three DApps with over 35,000 active addresses namely Uniswap, OpeanSea and MetaMask Swap. More importantly, the three DApps using BNB Chain grew by 190% or more, with Gameta being the most promising with over 900,000 active addresses.  Judging by the absolute numbers, which means a 12.5% TVL drop in BNB tokens and a 14% drop in active addresses on Binance Chain’s leading DApp, it can be concluded that the BNB token is poised for a correction.

About Hama Amefiz

Amefiz is a professional blockchain, cryptocurrency and tech journalist, regular contributor to newsbsc.com who is writing analysis about the latest developments in the cryptocurrency and blockchain space.

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