Crypto Analysis | BNB Explosion - Where are things going?
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BNB has been exploding in the last months making it the top 3 coin based on market cap
The reason for this is very obvious: it's a (much) cheaper alternative to ETH, making defi viable again. However, as many have pointed out, it's also much more centralized which is a big caveat for blockchain technology. Long term sustainability is therefore dependent on user behavior and the development of current rivals like ETH, Polkadot etc.
From a technical perspective it is somewhat hard to analyze BNB as it was listed just before the last bull cycle ended. For pattern analysis this means that we do not quite have enough data for a full breakdown. However, I have an idea in this regard, so let me show you first the basics.
This is the full data available for BNB/USDT:
As you can see, there was a 20x after it launched and a sideways movement since then until the beginning of this year when it just rocketed away... However, I think the strong upward movement has its roots in the strong impulse wave at the beginning of this chart.
BNB tends to shoot up by 80-200% and correct itself by 30-50%. The correction often reaches the previous ATH before moving upward again:
Currently, there is no way to know how high BNB will peak based on previous data. While the shape may be somewhat clear as to how it will get there (upward steps, with perhaps a bigger correction in between), the height will depend on its success in staying a top 3 coin. As its market cap is very similar to ETH (about 40 million higher), one could argue that it has a potential to reach about 75% of ETHs coming ATH. Factoring in the centralized nature of the chain and the fact that there is much less development on there I think we could say that it might reach about 50% of ETH (this is of course purely speculative). So how high will ETH go?
I think for ETH 10k is aminimum target, although I have looked at scenarios where it could go as high as 30k (one argument here is that it should reach a 0.1 ration to BTC which is expected to reach at least 300k). Working with this range, BNB could therefore peak between 5k and 15k. This is however on very shaky grounds as it is more speculative rather than based in data.
So take it for what you wil, but I definitely see BNB climbing to much higher highs than what we have previously seen.
As a general reminder: Please keep in mind that none of this is official investment advice! Crypto trading entails a great deal of risk; never spend money that you can't afford to lose!
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