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BNB, the native token of the BNB Chain, has experienced a notable decline of 16.1% from August 23 to September 2, dropping from a high of $598.80 to a low of $502.10. As of the latest update, BNB is trading at $517, having partially recovered from its recent losses. Despite this, concerns persist about a potential bearish trend, especially given that the token has struggled to remain above $610 since mid-June.
The decline in {BNB} price is accompanied by decreasing activity on the BNB Chain, particularly in decentralized exchanges (DEXs). This drop in activity raises questions about whether the $400 level seen on August 5 might be revisited. Market observers are also speculating that BNB’s price may experience a surge if Changpeng “CZ” Zhao, the co-founder and former CEO of Binance, is released from detention in the United States. While there is no direct correlation between CZ’s detention and BNB’s price movements, the anticipation of his release might influence market sentiment.
An anonymous trader known as Degen.eth has suggested that a price increase might occur following CZ’s release after he pleads guilty to money laundering charges and serves a four-month detention period. However, traders might preemptively buy BNB in anticipation of this event and potentially take profits as the release date approaches, making the investment based on CZ’s release speculative.
BNB remains the third-largest cryptocurrency by market capitalization, valued at $75.7 billion, which is a 23% premium over Solana’s market cap of $61.5 billion. Despite its large market cap, BNB Chain has seen its total value locked (TVL) decline to its lowest level since February 2021, with a 14% drop in deposits over the past three months. Key decentralized applications (DApps) on the BNB Chain, including PancakeSwap and PinkSale, have also reported significant declines in TVL.
In contrast, Ethereum and Solana networks have seen growth in their TVL during the same period, suggesting that the factors driving investors away from BNB Chain’s DApps may be specific to the network. Additionally, BNB Chain has experienced a 24% decline in DEX volumes in the week leading up to September 2, while the number of active addresses engaging with BNB Chain smart contracts has decreased by 18%. This downturn affects various types of DApps, indicating a broad-based decline in user engagement.
Overall, while speculation surrounding CZ’s release could potentially impact BNB’s price, the fundamental issues related to declining activity and TVL on the BNB Chain present challenges for the token’s price recovery.
