Binance Coin (BNB) is one of the most valuable cryptocurrencies in the world. The asset has come a long way from its early days, offering incredible value to investors despite only being available across a handful of exchanges.
After suffering a significant price hit following May’s downturn, BNB appears to be making a comeback. As a large-cap asset, it is one of the primary instigators of this comeback and has been rewarded handsomely as well. But investors still aren’t convinced. Below, we’ll look into whether BNB really has the potential to move forward or is still in the doldrums.
BNB: A Background to the Asset.
BNB is the native token for the Binance ecosystem. Launched in 2017, the coin essentially makes it easier to participate in the ecosystem of Binance - the world’s largest crypto exchange.
Association with Binance is BNB’s biggest benefit. The exchange has a lot of users, all of which use it because of its significant characteristics and features, But, with BNB, they even get to enjoy sweet discounts on fees and the ability to participate in some major decisions that involve the ecosystem.
In just a few years, BNB has grown to become the third largest and most valuable cryptocurrency. That isn’t bad at all. Of course, the coin also helps users of the Binance Smart Chain - Binanance’s high-performance blockchain that helps developers across different fields. Binance Smart Chain is Binance’s answer to the Ethereum blockchain - with the latter being bogged down by issues like rising gas fees and low scalability, several competing blockchains have tried to position themselves as stable alternatives. The Binance Smart Chain is one of them.
Developers in spaces like non-fungible tokens (NFTs) and decentralized finance (DeFi) can use the Smart Chain and build on it. For their work, BNB offers a medium of transactions. So, it goes without saying that an increase in adoption for the Smart Chain will lead to a price jump for BNB.
BNB: Price Movements This Year
BNB started 2021 pretty modest, with a price peg of $38.84. The coin was able to benefit from the market jump, with names like Bitcoin and Ethereum also leading the charge. Soon enough, the BNB price started to surge.
By May 11, BNB had hit an all-time high of $691.54 - a jump of over 1,600 percent from the point when it started the year. But, the downturn happened and BNB’s price took a severe beating. The coin dropped to as much as $209.95, with the coin itself being significantly battered when the downturn was done.
After testing different lows, however, BNB appears to be making a comeback. Its price began rising on July 22, and it has never particularly looked back since then. The BNB price now stands at $405.27, and there is hope for even bigger gains going into the future.
BNB: Technical and Fundamental Outlook
When it comes to technicals, BNB is looking pretty good. The coin is trading above its 20-day moving average (MA) of $350.62, meaning that it has enough momentum to swing higher in the coming days.
BNB also has a relative strength index (RSI) of 72.83. That might seem like the coin is overbought, but it’s still pretty normal for a cryptocurrency - much less one like BNB that is popular.
On the fundamentals front, there is a lot going on with BNB. As explained, BNB is closely tied with Binance and the Smart Chain. So, their outlooks will affect its price.
Sadly. Binance hasn’t been doing so great. The exchange has been involved in different rows with different regulators, and it has had to cut down on several of its services. Just this month, Binance has had to halt derivatives trading for its users in Hong Kong as it looks to offer a stronger and more regulatory-compliant service. The exchange has also had to stop trading pairs in the Korean won after crypto regulations in the country have gotten tighter.
This is in addition to issues with regulators in countries like the United Kingdom and Italy.
Then, there’s the Binance SMart Chain, which is looking to usurp Ethereum. The Ethereum blockchain remains the primary blockchain for developers in the crypto ecosystem, and it recently got a boost after the successful London hard fork. As the Ethereum blockchain looks to continue moving towards a proof of stake (PoS) system, it can't be much good news for the Smart Chain.
Of course, this isn’t to say that it’s all gloomy. Binance is still the world’s largest exchange, and partnerships with companies like Alchemy Pay and so on should help bolster its services. If there’s any company that can handle the current regulatory landscape, it is Binance.