Analysis of the impact of revolutionizing the Binance smart chain on BNB utility

The Binance Smart Chain BSC is a blockchain platform that allows developers to create dApps and digital assets on top of it. Recently Ethereum, a layer 2 network has emerged as a network with a lower gas fee. While on the contrary, the gas fee which is also known to be the transaction fee of BSC is quite high. Being one of the major challenges the platform is facing currently.

KEY TAKEAWAYS

• Higher Gas fees have been hindering the network activity of BSC
• BNB has put forth a new proposal to curb this issue

The Binance Coin BNB has put forth a new proposal to curb this issue on its network, of higher gas fees. The proposal aims to reduce the gas fees for the users. Binance believes this strategy will help them bring more users to the platform.

Can the implementation of the proposal benefit BNB?

Lower fees are mandatory to attract more users. Thus lowering gas fees will allow Binance Smart chain BSC to attract more users to the network. As lower fees are affordable for the users to carry out transactions on the network. Moreover, with more users adopting the network and utilizing Binance Coin BNB can potentially increase the utility and demand for the token as well.

However, despite all the aforementioned benefits BNB has already started to a bearish weak. The price of BNB dropped to $305 on Monday before it slightly bounced back to $316. Thus representing a 3% increase in price. Retesting of the Relative Strength Index and a 50-day moving average resulted in the rise of the price.

The price movement of BNB was trading within a wedge pattern which is defined by the support and resistance lines. A wedge pattern is a technical chart formed by two converging trendlines. Though in the case of BNB, the price has been trending downwards, bearish, for almost two weeks. This happened after it reached its resistance line of $347, which is the upper boundary of the wedge pattern. Thus if the price continues to decline it may reach its support line near $280.

However, there is still hope for a strong bounce back from the current level. A contributing factor in this regard could be the mean coin age metric, a measure of the average age of all coins in circulation. Moreover, this metric has been attributed to the price surge due to its consistent rally despite the dip in price.

On the 28th the age consumed, metric noticed a sharp spike. which must have led to the price bouncing back. Furthermore, favorable investor sentiment was witnessed within the range of 22-29 March. As the weighted sentiment also wents upwards thus representing a possibly bullish price action.