Binance Coin (BNB) is experiencing a notable surge in momentum, fueled by a significant rise in decentralized exchange (DEX) volumes on the BNB chain. This increase in activity has sparked optimism, with many speculating that BNB could be on the verge of a collapse that could push its price towards $800.
Record-breaking DEX volumes indicate growing demand
Recent data from Defillama shows that weekly DEX volumes on the BNB chain reached $17.74 billion. This is the highest level seen since December 2021, representing a strong recovery and increased market interest. The boom has been led by two major on-chain protocols: Pancakeswap and Thena. Pancakeswap, in particular, saw a massive 298% increase in its weekly volume, while Thhea grew by 111%. This rise in DEFI activity is expected to have a positive impact on the price of BNB, as greater network usage increases demand for the native token.
As of now, BNB is trading at around $697, reflecting a modest 2% gain in the past 24 hours. This price adds to the broader market recovery, as BNB has shown resilience despite challenges in the broader cryptocurrency ecosystem. Given the continued rise in Defi activity and the potential for further upward movement, the future looks promising for BNB.
Bullish technical patterns point to $800
On the daily chart, BNB is forming an ascending triangle pattern, a classic technical setup that indicates a continuation of the upside. The upper trend line for this pattern sits at $722, making this level a major resistance point. If BNB can break this resistance, it could lead to a continued localization, with a potential target price of $823, marked by the 1.618 Fibonacci extension level.
In addition to the technical pattern, the Relative Strength Index (RSI) has crossed into positive territory, indicating increased buying pressure. When the RSI stays above the 50 mark, it usually indicates increasing bullish sentiment, supporting the possibility of a breakout to higher levels. If the bullish momentum continues, BNB could surpass its all-time high of $793 and challenge the $800 mark.
However, traders should remain wary of the awesome Reed Oscillator (AO) bars, which indicate some downward pressure. Failure to break the $722 resistance or a decline below the lower trend line of the ascending triangle could signal a reversal and lead to a price pullback.
Short squeeze potential can cause prices to increase
A noteworthy factor that could boost the price of BNB is the presence of a large number of filters above the current market price. According to Coinglass’s Lividents map, if BNB fades through the $706 mark, it could trigger a short squeeze. This would force short sellers to cover their positions by buying BNB again, adding buying pressure and potentially pushing the price higher.
On the flip side, a drop below $678 could trigger a long liquidation, which could push the price lower. As such, traders need to carefully monitor key support levels to gauge overall market sentiment and avoid getting caught in a potential bearish move.
Conclusion: Is $800 affordable?
An increase in DEX volumes and a bullish BNB setting on the daily chart indicate that the token could be preparing for a breakout. If BNB can break its resistance levels and maintain its upward momentum, a move towards $800 and beyond is certainly possible. However, traders should remain vigilant and watch for any signs of weakness, as a breach of critical support levels could lead to a reversal.
The coming days will be crucial to determine whether BNB can continue to rise or whether the market dynamics will shift, leading to a potential decline. With the booming Defi sector and BNB showing strong technical indicators, the token could be poised for an exciting few weeks ahead.
Post views: 1
