• Binance Smart Chain has risen in popularity as high gas prices on Ethereum has caused investors to seek opportunities elsewhere.
  • After Ethereum, BSC is one of the most robust DeFi ecosystems and has gained traction from many retail users.
  • A recent report suggests that large investors have also flocked to BSC as transactions on the blockchain spiked. 

The Binance Smart Chain (BSC) launched in fall 2020, which enabled smart contracts for tokens on the Binance blockchain has processed ten times more transactions than Ethereum at its peak. According to a recent report, BSC has attracted large investors who contributed to its rapid expansion.

Investors seek cheaper and faster network

Blockchain data firm Nansen found that high-value traders have been behind BSC’s rapid growth, given the active addresses seen on the blockchain. 

Stablecoin transactions with over $1 million in value were responsible for 90% of the total stablecoin volume in Q2 2021 when decentralized exchange PancakeSwap running on BSC witnessed a surge in activity.

Traders who have profited by over $100,000 by providing liquidity in DeFi protocols by lending out their assets have increasingly shown interest in BSC. 

According to Nansen, smart money users, which the firm refers to include liquidity providers, whales and funds, could indicate possible optimistic indicators of a project or protocol. Although some have negatively looked upon Binance Smart Chain in the community, the company’s data shows that a large number of smart money addresses have participated in both Ethereum and BSC.

Despite the prevailing belief that retail investors looking for lower transaction costs being the reason behind BSC’s success, the blockchain firm’s findings suggest that large investors have been contributing to the growth of the Binance blockchain.

Due to Ethereum’s excessively high gas fees, which have also priced out retail investors, Binance Smart Chain positioned itself as an ETH competitor, offering efficient transaction times and cheaper fees.

Namsen further pointed out that BSC has processed around ten times more transactions than Ethereum in May and August 2021. PancakeSwap also surpassed Ethereum in daily transactions in April. 

Binance Coin price searches for support

Binance Coin price is slowly recovering from the massive losses witnessed on September 7, which wiped out nearly 30% of its value. Currently, BNB is searching for a foothold to prevent it from falling further. 

BNB is supported by the 100 twelve-hour Simple Moving Average (SMA) at $399 as it attempts to reverse the downtrend. However, alarm bells continue to ring for Binance Coin price as the token could continue to drop lower as the buyers are nowhere to be found.

The Arms Index (TRIN), which measures overall market sentiment, suggests that there are still more sellers in the market than bulls. If BNB loses the aforementioned support, Binance Coin price will discover the following line of defense at the 38.2% Fibonacci retracement level at $394 before a further decline.

BNBUSDT

BNB/USDT 12-hour chart

Should Binance Coin price continue to slide, the target for the bears is at the 200 twelve-hour SMA, which sits at $361.

Moving forward, the bulls would need to challenge the next resistance level at the August 16 high at $436 before attempting to reach the 50% Fibonacci retracement level at $451. 

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