- BNB price to be greatly influenced by the institutional integration of Binance Smart Chain (BNC).
- A delayed reduction of Ethereum gas fees will favor BNB in the long run.
Binance Coin (BNB) continued with its attempt to return to ascending trajectory, trading sideways for most of the day to end at $227.32 at the time of going to press.
The altcoin has risen quickly to reach $35 billion and rank among the top 5 most valuable cryptocurrencies. However, despite a 1,119% gain over the past year, BNB has recently slowed down after reaching a record-high $340 a week ago. The virtual currency is currently in need of a higher momentum for a price spike but has to take on a bigger challenger, namely Ethereum.
Cryptocurrencies have had a rollercoaster drive through price charts for most of January and February. During this momentous period, the crypto-market has had some sort of a meteoric rise, with notably negligible levels of cannibalism among competing virtual currencies.
Bitcoin reached an all-time high of $58,354, hitting the $1 trillion market capitalization. Similarly, Ethereum set an all-time high of $2,036, while Dogecoin’s fairytale rise saw it hit a record-high $0.0871. BNB set its own record high during that period, but its future growth prospects look likely to be dependent on the outcome of its rivalry with Ethereum.
The market has since been in a correction mode, with a major reduction in value for both BTC, ETH, and altcoins.
Exodus from Ethereum
For the longest time, Ethereum has enjoyed its hold on the claim of being the most efficient provider of DeFi protocols and smart contracts. However, it is increasingly coming under pressure from advanced altcoins such as Polkadot and Binance Coin, whose blockchain ecosystems are just as competitive.
Also, Ethereum’s gas fees have developed a notorious reputation of being exorbitant. This has triggered movement from Ethereum to Polkadot, Cardano, and Binance Coin, in a trend that is fast gaining traction in the market. This exodus from ETH will certainly be propelling Binance Coin to greater heights.
The exodus from Ethereum has begun in earnest, with the latest departure being by 1inch. The decentralized finance project, which traces its origins to Ethereum, has expanded to Binance Smart Chain (BSC). In an announcement made on Thursday by the 1inch team, 10 million 1inch tokens worth more than $40 million were moved to BSC. The team intends to provide liquidity for bridging the gap between BSC and Ethereum. This is a major gain by Binance, whose BSC protocol is hardly a year old.
Earlier this month, Harvest Finance, which specializes in aggregating yields and Value DeFi, announced its intention to expand to BNB. The two entities have been primarily using Ethereum for their DeFi assets worth nearly $1billion in total value. The latest development follows an earlier move by Alpha Finance Lab that saw the company integrating with Binance’s BNB.
Such moves will present big wins for Binance and will certainly provide the impetus for an upward price rally by BNB.
At the moment, Binance’s strongest asset is BSC’s low fees, which it hopes will keep bringing in new investors. However, Ethereum is working on a price-reduction strategy for its gas fees, which may turn tables on Binance.
With charges as low as $0.04, the Binance BNB transaction fee offers a much better deal than Ethereum’s $5.53, giving it a competitive edge. As the DeFi momentum is likely to be here for the haul, much of the BNB price trajectory will depend on whether Ethereum will ultimately lower its gas fees.
Technical outlook
BNB will find support at $214.9, with the first resistance at $254.0 and the second one at $260. A bullish run will drive prices to the second resistance level at $300.7
The Relative Strength Index stands at 54, indicating that the selling pressure and buying pressure were almost at par. This gives the price a higher chance of rising under existing market conditions.
