Trading volume on Binance’s BNB Chain decentralized exchange (DEX) surpassed $700 million for the first time since May 2, according to Artemis data. This increase in DEX trading volume indicates increased user activity and participation on the BNB Chain network.
The increase in DEX trading volume on the BNB Chain marks a reversal from the downward trend seen in mid-April. During this period, DEX trading volume did not exceed or touch $1 billion, suggesting that trading on the chain may be sluggish.
The correlation between DEX trading volume and demand for the native cryptocurrency, BNB, is significant. Higher DEX volume generally means increased network participation, which could mean more people want to use the digital currency to trade on the BNB chain, also known as “BNB.” Conversely, low DEX volume could mean less trading activity, which could lead to lower BNB demand.
At press time, the value of BNB was around $593.70, up slightly by 1.23% in 24 hours. If the trend of increasing DEX trading volume on Binance Coin Chain continues, the price of the coin may rise. However, it is important to note that this cryptocurrency has not been under significant buying pressure recently, which could hinder a large-scale price rally.
Research shows that despite recent increases in DEX volume, BNB on-chain volume has been declining since May 10th. This difference between DEX volume and overall on-chain volume raises questions about how long this increase will last.
Typically, rising volume and price signals a continuation of the bullish trend, but this is not the case with BNB. A scenario where the price rises while on-chain is falling may indicate a weak upward trend. In this situation, the price may break the support area near the $580 level.
Another important statistic is Total Value Locked (TVL), which measures network health and trust. A high TVL indicates that market participants are staking or locking their assets into the system for higher returns. Some assets were withdrawn as TVL fell due to a lack of faith in the protocol’s ability to deliver attractive returns.
DeFiLlama reported $61.2 billion for Binance Smart Chain TVL. A detailed study of the chain process shows that TVL has increased significantly over the past week. These widespread improvements across the protocol show that more people trust this chain and expect it to grow.
Despite the recent surge, TVL currently remains well below its peak levels earlier this year. Depending on the BNB PredictionAmong other prerequisites, to achieve a future value of $1,000, TVL must exceed $10 billion.
While Total Value Locked (TVL) is a useful metric, it is important to remember that there are many other factors that affect the price of a cryptocurrency besides the amount “locked” in a particular network. Economic conditions, regulatory changes, and market sentiment must be taken into account when discussing the potential trajectory of the price of BNB and other cryptocurrencies.
The recent increase in trading volume on the BNB chain indicates increased user participation. However, concerns are growing about the sustainability of this rally due to the gap between DEX and on-chain trading volumes and lower-than-expected TVL levels. When making financial choices, it is important to conduct extensive research, evaluate a variety of criteria, and exercise caution.