BNB Chain DEX Trade Volumes Plunge 24% in a Week

The BNB price is struggling due to declining fundamentals, but the potential release of Changpeng CZ Zhao could serve as a catalyst for recovery.

Source: coinmuhendisi.com

BNB’s price has faced significant challenges recently, dropping by 16.1% from August 23 to September 2, sliding from $598.80 to $502.10. Despite a recent rebound to $517, fueled by notable buying activity below $510, investors remain apprehensive. Concerns mount that BNB might be entering a bearish phase, especially since the token has struggled to stay above $610 since mid-June. Some investors are hopeful that Changpeng CZ Zhao’s potential release could provide the boost BNB needs, even as the network’s fundamentals show signs of deterioration.

Falling Activity on BNB Chain Increases Sell Pressure

Metrics for BNB Chain reveal a notable drop in interest, especially in decentralized exchange (DEX) volumes. This decline has led traders to speculate whether the $400 level observed on August 5 might be revisited. Some market observers believe that BNB could break out of its current consolidation pattern following the release of its co-founder and former CEO, Changpeng Zhao (CZ), from detention in the United States. Although there’s no direct correlation between CZ’s situation and BNB’s price, his influential presence and the anticipation surrounding his release could affect market sentiment. Anonymous trader Degen has predicted a potential BNB price surge, anticipating that CZ will be freed after pleading guilty to money laundering charges and spending four months in detention. Although there is no direct correlation between CZ's situation and BNB's price, his influential presence and the anticipation surrounding his release could potentially affect the market.

Even if a significant price surge occurs, traders might try to capitalize on this by buying in advance of CZ’s release and selling off as the date nears. Thus, investing in BNB solely based on the anticipation of CZ’s release could be risky, particularly given the current weakness in BNB Chain’s activity. Despite its recent struggles, BNB remains the third largest cryptocurrency by market capitalization, excluding stablecoins, currently valued at $75.7 billion with 23% premium over Solana’s $61.5 billion market cap.

Interestingly, the Solana network has higher deposits in its smart contracts compared to BNB Chain. Adding to BNB Chain’s challenges, its total value locked (TVL) recently fell to its lowest level since February 2021. This decline reflects a broader trend, as total cryptocurrency TVL has grown by 27% year to date in 2024. Data indicates that BNB Chain’s TVL dropped to 7.5 million BNB as of August 20, marking a 14% decrease over the past three months. Notable declines include leading exchanges, which saw their TVL decrease by 15% to 2.93 million BNB, and decentralized launchpads, which experienced a 26% drop in TVL.

Disclaimer: FameEX makes no representations on the accuracy or suitability of any official statements made by the exchange regarding the data in this area or any related financial advice.