17 May 2024

It was going to be another dull week until… the US CPI numbers came out. Bitcoin has surged to $66,000 after the US inflation data came in line with expectations. Market sentiment seems buoyant though most altcoins haven't put in a green weekly candle. While Ethereum continues to trade below $3,000, Solana has reclaimed $160. The week, however, belonged to memecoins - especially PEPE which registered a new all-time high and entered the top 25 crypto asset list.

In our Hot Take today, we analyse BNB, earlier known as Binance Coin, and its ecosystem.

Before that, lets dive into the top-3 stories and macros of the week.x`

Top-3 stories of the week:

1

2

3

The newsletter is put together by Giottus Crypto Platform. You can read all the previous issues of Cryptogram here.

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WEEKLY MACROS

• Total crypto market cap - $2.37 trillion - UP 2.2%

• Bitcoin price - $66,288 - UP 5.5%

• The dollar index (DXY) - 104.55 - DOWN 0.7%

• Bitcoin Dominance - 55.81% -  UP 1.8%

• Crypto Fear and Greed Index - 74 - Market is in Greedy State

THE HOT TAKE

BNB continues to be a winner

BNB, formerly Binance Coin, was a darling of the masses in the previous bull run where it quickly rose in into the top 5 crypto assets list by market cap. The adoption and influence of Binance globally and the vision of its founder CZ were the key drivers of this growth.

In the last three years, Binance has faced regulatory scrutiny in multiple markets with CZ even getting a prison sentence in the US as a result. Binance formally detached itself from BUSD, BNB ecosystem’s stablecoin. In spite of all this, BNB - the coin and the ecosystem - has survived and thrived. It continues to be among the top 5 crypto assets with a $84 billion market capitalization today.

Let us discern the key trends in BNB and its ecosystem.

1) BNB Technical Analysis - $620 on the cards?

BNB, trading around $300 in Feb, doubled in a just a month to $600 in March. BNB’s saw a 20% decline in April and is currently under recovery mode. Its Relative Strength Index (RSI) is gliding in neutral territory, indicating lesser buying pressure

Its price action is moving sideways in a horizontal trend channel and consolidations are likely to continue. BNB is registering short line candles in the daily chart, indicating lesser swings in short term. A successful bullish breakout could drive BNB towards the recent high near $620.

Resistance: $620, $675

Support: $550, $515

2) Key ecosystem metrics have shot up in Q1 2024

While its stablecoin market cap is down, BNB’s TVL, transactions and revenue are all trending up.

3) USDT & USDC accounts for over 20% of the daily transactions

In Q1 this year, many protocols on BNB Smart Chain saw an increase in average daily transactions. USDT did 619,300 daily transactions on average, 22% up from previous quarter. PancakeSwap came in second with 345,200 daily transactions

4) Defi growth was mixed

The total value locked (TVL) in BNB Smart Chain's DeFi projects, measured in USD, went up from $4.3 billion in Q4 to $7.2 billion in Q1, a 67% increase. This made BNB Smart Chain the third highest chain by TVL (accounting for 6.51% of total TVL). However, when measured in BNB, the TVL slightly decreased by 12%, from 13.6 million to 11.9 million BNB. This suggests that the increase in TVL in USD was due to both the rising price of BNB and new capital coming in.

While BNB’s number of transactions has been pretty stable since January 2024, its DEX volume has been on a downward slope since mid-April and has failed to hit or surpass $1 billion.

5) opBNB network grows

The opBNB network is a Layer 2 scaling solution for the BNB Smart Chain, using the bedrock version of the Optimism OP Stack. It helps by handling transaction processing and resource usage away from the BNB Smart Chain, but it still records data on the main network. In Q1, the total value bridged (TVB) more than doubled to $63.7 million. USDT is the most popular token being bridged on opBNB.

Key takeaway

Binance continues to be a global force in spite of its hiccups. BNB has established itself as a key part of the Binance ecosystem, used as the main currency for many applications and services. Over the years, BNB Chain has shown its growing popularity and effectiveness in the blockchain space.

The recent and upcoming hard forks on BNB Chain mark a new phase of innovation and efficiency. These updates improve transaction processes, enhance storage, and phase out old chains, showing BNB’s dedication to progress. With these changes, the future of BNB looks very promising, set for ongoing growth and success.

BNB, the asset, has held its range against Bitcoin and Ethereum and is looking as an early winner pick for this bull run as well. If BNB is on your radar, now is a good time to gain some positions.

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If you have any questions or feedback for us, write to us at [email protected]. You can check out the previous issues here.

Disclaimer: Crypto products and NFTs are unregulated and can be highly risky. There may be no regulatory recourse for any loss from such transactions. Please do your own research before investing and seek independent legal/financial advice if you are unsure about the investments.