Binance’s BNB Almost Hits $650 on Ethereum Flippening Sentiment

Binance's BNB Almost Hits $650 on Ethereum Flippening Sentiment
Binance’s BNB Almost Hits $650 on Ethereum Flippening Sentiment

Yerevan (CoinChapter.com) — BNB is flying to the moon.

The Binance ecosystem’s official cryptocurrency almost reached $650 on Monday in a gravity-defying price rally that started at the end of March. Back then, the BNB/USD exchange rate had corrected to as low as $253.17. But as of Monday, bids for the pair rose to as high as $643.65 — that’s roughly 187 percent profits in just eighteen days of trading.

BNB’s latest climb surfaced in the wake of a flurry of technical and fundamental catalysts. Traders flocked into the Binance token market after assessing the Binance Smart Chain’s capability to flip its top rival Ethereum for the top smart contract-enabled blockchain title.

BNB Flippening ETH?

Hacker Noon reported that about $1.37 million worth of tokens left the Ethereum network to join Binance Smart Chain (or BSC). Meanwhile, everyday transaction volume on BSC surged higher than the ones recorded atop the Ethereum public ledger. That proved one thing: Binance’s so-called centralized blockchain gives Ethereum’s decentralized one a run for its money.

“The reason BNB is making crazy gains is unlike other token exchanges; it also has a use case of being a smart contract ecosystem solution via BSC,” said a pseudonymous analyst. “It is striving and succeeding in becoming the substitute for ETH. This is a quality that no other token has.”

BNB serves as a settlement token across Binance’s projects, including BSC. The battle of two blockchains allowed the one with higher leads to attracting more traders towards its native token. That somewhat explains why BNB rallied aggressively so far into 2021 — its year-to-date returns were up by as much as 1,618 percent. In comparison, Ethereum’s native token Ether surged 197 percent.

Not So Flip-Like

Independent market analyst PostXBT discussed a “flippening” scenario — wherein one token overtakes the other by market cap — between BNB and Ether but called the phenomenon far-fetched, at least in the short-term.

“A BNB/ETH flippening means another ~3x for BNB from here with ETH price remaining static,” he said. “If anything, I see flippening talks as a great time for BNB holders to take profit and actually shift some into ETH.”

So it appears, BNB traders were securing their gains as the token mounted towards $650. Some strong selling near the new record high pushed BNB/USD lower by more than 12 percent. Meanwhile, the pair looked way too overbought thanks to 70-plus relative strength indicator readings. That typically leads to a neutralizing downside correction move.

Binance Coin corrects lower after setting up a new record high near $650. Source: BNBUSD on TradingView.com
Binance Coin corrects lower after setting up a new record high near $650. Source: BNBUSD on TradingView.com

The next downside target for BNB sits near $383 (the 20-day exponential moving average green wave in the chart above).

Photo by Jonathan Chng on Unsplash

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