BNB ($1,329.80) has surged to a new all-time high today, fueled by renewed bullish sentiment and fresh capital inflows into risk assets amid a weakening US dollar.
However, beneath the surface, on-chain data tells a different story. User activity on the BNB Chain has been on a steady decline since late September, signaling that the user demand on the network is weakening even as prices soar. What does this mean?
BNB’s Bull Run Faces Risk
BNB’s price has surged 25% over the past week, making it the best-performing asset among the top five cryptocurrencies by market capitalization. This double-digit rally pushed the token to a new all-time high of $1,263, where it reached earlier today.
However, there’s a catch. On-chain data reveals that while BNB’s price has climbed sharply, user activity on the BNB Chain has been trending downward.
For example, Glassnode data shows that the BNB Chain’s daily new address count has declined by 57% since September 24, marking a sharp slowdown in network growth.
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BNB Number of New Addresses. Source: GlassnodeA drop in a network’s new address count signals weakening demand and lower user participation. New addresses typically rise alongside price in healthy market rallies as more users join in.
Therefore, the divergence noted in BNB’s case signals that the price surge is not driven by new demand for the coin or an uptick in network activity. This puts it at risk of a pullback in the near term.
BNB Bulls Are Losing Steam
Furthermore, readings from BNB’s Relative Strength Index (RSI) hint at potential buyers’ exhaustion, which could trigger a price correction in the near term. At press time, this momentum is at 75.79, signaling that the altcoin is overbought, and its upward momentum could soon fade.
BNB RSI. Source: TradingViewThe RSI indicator tracks an asset’s overbought and oversold market conditions. It ranges between 0 and 100, with values above 70 suggesting that the asset is overbought and due for a price decline. Conversely, values under 30 indicate that the asset is oversold and may witness a rebound.
At 75.79, BNB’s RSI signals that it is becoming significantly overbought. With no real demand backing the rally, a pullback is inevitable in the near term.
BNB Faces $1,100 Test
Without a rebound in network activity to validate BNB’s price action, its price could dip toward $1,100. If this critical support floor fails to hold, the coin’s price could fall further to $971.80.
BNB Price Analysis. Source: TradingViewHowever, if macro momentum strengthens or actual demand for BNB soars, its price could register a new price peak over the next few trading sessions.
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