BNB (BNB) Surges 25.7% in Three Weeks, But Can It Reclaim Its ATH of $724?

BNB (BNB), the native token of BNB Chain, surged to $614 on Sept. 27, marking a 25.7% gain over three weeks. This is the first time BNB has closed above this level since June 2024.

BNB's recent price surge is likely not due to CZ's release

BNB's recent price surge to above $600 has sparked speculation, especially considering that Binance founder Changpeng "CZ" Zhao was released from US custody on Sept. 26 after pleading guilty to a felony charge in April. However, there is little evidence to suggest that CZ's legal troubles are directly impacting BNB's market performance.

BNB's value is primarily driven by its utility within the Binance ecosystem, including launchpads incentives, trading fee discounts, and within the BNB Chain's decentralized applications (DApps). Hence, to determine whether BNB can continue to rally and potentially reclaim its all-time high, one must assess the demand for BNB across its ecosystem.

More importantly, to gauge the sustainability of BNB's price rally, one must compare BNB Chain's performance to rival blockchains like Ethereum and Solana. The total value locked (TVL) is a key metric that tracks the deposits locked in a network's smart contracts, making it a crucial indicator of blockchain activity.

For the BNB Chain, the TVL has stagnated around 8.2 million BNB over the past two months, according to DefiLlama data. In comparison, deposits on the Ethereum network increased by 8% to 19.2 million ETH, while Solana's TVL surged by 20% to 35.7 million SOL during the same period.

In terms of DApp volumes, BNB Chain saw a 35% decline, with $26.7 billion in total activity over the past 30 days, according to DappRadar. This trend closely mirrors Ethereum, which experienced a 36% drop to $129.1 billion in the same timeframe. Similarly, Avalanche's DApp volume dropped by 24%, totaling $1 billion in the 30 days leading up to Sept. 27.

BNB Chain activity does not stand out from competing blockchains

Despite BNB Chain's declining volumes, this pattern appears consistent with the broader cryptocurrency market. However, not all DApps require large transaction volumes or deposits to be successful.

Sectors like non-fungible token (NFT) marketplaces, collectibles, mini-games, social networks, prediction platforms, and other Web3 services often prioritize user engagement over transaction volume. Thus, the number of active users is another important measure of a network's health.

For BNB Chain, the number of active addresses interacting with DApps increased by 4% over the past 30 days, reaching 2.47 million, according to DappRadar. In contrast, the Ethereum network saw a 23% decline in active addresses, falling to 1.51 million over the same period.

Meanwhile, Avalanche's active addresses increased by 1% to 57,870, while Polygon experienced a 17% decrease in users during this period.

Hence, there has been no major development in the BNB Chain ecosystem that would justify BNB outperforming the broader altcoin market. Additionally, there is no evidence to suggest that the release of CZ from U.S. custody is fueling a price surge. As a result, there is little basis to expect BNB to reclaim its all-time high in the near term.