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Over the past seven days leading up to March 29, BNB experienced an impressive 12% surge in value, hitting a nearly two-week high of $620. This upward momentum narrowed the valuation gap between BNB and its main competitor, Ether, which saw a 5% gain during the same period. Despite this positive movement, analysis of on-chain BNB Chain data suggests that the recent rally may have reached an overextended point.

 

 

 

Experts point out that the cryptocurrency market’s upward trajectory closely correlates with inflows into spot Bitcoin exchange-traded funds (ETFs), which faced a setback in the week ending March 23. For the first time since the introduction of spot ETFs in January, these financial instruments experienced a net outflow of $890 million. However, recent data shows a notable decrease in outflows from Grayscale’s GBTC fund, with only $104 million leaving the fund on March 28.

 

 

 

In the first half of March, BNB’s price witnessed a remarkable 61.7% surge, reaching a peak of $645 and a corresponding market capitalization of $96.4 billion. To put this into perspective, BNB’s all-time high valuation of $116 billion was achieved in November 2021. Interestingly, the total value locked (TVL) on BNB Chain, representing total deposits in the network’s smart contracts, peaked at $15.7 billion during this surge but has since declined to $7.1 billion, marking a 55% reduction. It’s essential to consider that the entire crypto market, particularly decentralized finance (DeFi), has experienced significant contraction since late 2021. Therefore, attributing the decline in BNB Chain’s TVL solely to BNB may not be entirely accurate. For instance, total market data for all blockchains tracked by DefiLlama, which once reached nearly $205 billion, now stands at $155 billion, indicating a 25% decrease.

 

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