Binance Cryptocurrency Sale: BNB Token Prospects

The BNB exchange rate in June 2023 is noticeably fluctuating. First it fell by 27%, and then it rose by 10%. Investors don’t know what to do with their savings. And the management of Binance assures that the situation with BNB is under control.

BNB Technical Analysis

From April 17 to June 12, 2023, the value of BNB fell by more than 37%. At the same time, more than 27% occurred in just seven days, from June 5 to June 12. Investors actively got rid of cryptocurrencies in connection with the lawsuit that the US Securities and Exchange Commission (SEC) sent against Binance.

Interestingly, all this was accompanied by a positive change in the Open Interest indicator, which shows the total number of futures contracts at the end of the day. This takes into account the instruments opened in both long and short positions. Their number grew until June 16, when the figure peaked in a month and a half and reached $395.52 million.

At the same time, the Weighted Funding Rate, starting from June 10, was below zero. So the bears were willing to pay the bulls to keep their short positions open.

There was a situation when the number of futures in BNB was growing, and the market was dominated by short players, which, of course, indicated a further decline. Also in favor of the judgment was the fact of the sale of Binance cryptocurrency by major players. Network analyst Lookonchain revealed that a major player, who did not commit any actions for two years, sold 10,000 BNB worth $2.3 million.

And there were also rumors that Binance CEO Changpeng Zhao personally began to merge the cryptocurrency. However, CZ (the pseudonym of the head of the exchange) later self-checked this information, calling it a manifestation of FUD (fear, uncertainty, doubt).

From the point of view of technical analysis, the picture is ambiguous. On June 12, BNB reached its local low of $220.4. It coincided with the minimum values of December 2022. In other words, the coin has reached the support level. After that, it rebounded from the level and grew by almost 10% (the price at the time of writing on Monday, June 19, is $242). The nearest target should be the resistance level – $252.8. At the same time, not so long ago, a dead cross was formed on the chart – a situation where the faster 50-day moving average (indicated in purple) crossed the slower 200-day moving average (indicated in green) from top to bottom. This is usually considered a bearish omen.

So, as far as the value of BNB is concerned, the negative is prevailing right now. Is there a positive aspect in the fundamental aspect?

Luban Update

The fact that the Luban update is coming was reported back in May 2023. And now, on June 11, the update was activated. Luban offers three improvements: BEP-126, BEP-174 and BEP-221. Binance Chain itself paid special attention to the first one:

“The long-awaited update introduces the Fast Finality mechanism. With Fast Finality, block reorganization is a thing of the past. What does this mean for you? Improved protection against double-spend attacks and MEV reorganizations, irreversible transactions after confirmation, and efficient operations for exchanges and DeFi protocols. While BEP-126 does not directly speed up transactions or reduce fees, the update contributes to maintaining the security and reliability of the BNB Chain ecosystem.”

The Fast Finality mechanism, in fact, is an acceleration of block formation. This is quite a useful thing: users will be able to make sure that they receive reliable information from the last completed block and can decide on further actions.

BEP-174 presents a proposal to improve the management of inter-network repeaters. A relay whitelist was recently put in place. It is proposed to introduce a control mechanism that could register a single repeater. Managers will be selected or removed by the project management. BEP-221 lays the groundwork for the next CometBFT Light Block Validation update, which is directly related to validation.

Second-level blockchain

On June 15, the platform posted a 17-second video on its official Twitter page. In it, the BNB Chain team announced that soon everyone will see the full power of their blockchain. As soon as the second-level solution is released. The video says that the Layer 2 solution will increase throughput, as well as make the transaction processing process more economical. The solution is already being tested.

So far, there are more questions than answers. There is quite a lot of speculation about this decision. In the comments to the video on Twitter, there are statements like:

“Good marketing for distraction, classic.”

Industry experts suggest that the second-level solution will help cure the scalability problem in the long run. Many people face this problem. New solutions are expected for decentralized applications (dApps) and decentralized finance (De-Fi) projects.

In other words, life inside Binance Chain continues to boil. Luban update has been released, and the implementation of the second-level blockchain is next in line. But the price of BNB is in a bearish trend: investors continue to experience excitement in connection with SEC lawsuits about the world’s largest crypto exchange.

This material and the information contained therein do not constitute individual or any other investment recommendation. The opinion of the editorial staff may not coincide with the opinions of the author, analytical portals and experts.