Binance Coin price outlook as BNB Chain transactions slip
BNB Coin, like other cryptocurrencies, has been in a consolidation phase recently.
The number of transactions in the ecosystem has dropped from its April high.
There are concerns about the US debt ceiling as divisions increase.
Binance Coin price moved sideways as concerns about the debt ceiling issue continued. After soaring to a high of $346, in April, the token has dropped to $315, giving it a market cap of over $47 billion. The coin remains about 39% above the lowest level this year.
Debt ceiling concerns remain
The main reason why the BNB price has gone nowhere in the past few days is the ongoing risk-off sentiment in the market. This sentiment is evidenced by the rising US dollar index (DXY) and the VIX index, as I wrote here.
The biggest concern among investors is the ongoing debt ceiling discussion in the United States. With divisions between the democrats and republicans widening, there are concerns that the American government will default.
The plot thickened when Fitch, a leading credit rating agency, placed the American government in a watch for a rating downgrade. This means that the company will not delay downgrading the government in the coming days.
As I wrote in this article, this defauly will likely not happen since the two sides will likely reach an agreement in the 11th hour. In most periods, cryptocurrencies tend to move in sync with each other, which explains why other coins have dropped.
The Binance Coin price has moved sideways as the number of transactions in the ecosystem wane. Data by BNB Explorer means that the number of transactions in the ecosystem dropped to 5.337 million on May 17th to $4.41 million on May 24th.
At the same time, the volume of BNB traded per day has been in a strong downward trend, as shown in the chart below. This is also the same as with other cryptocurrencies like Bitcoin, Ethereum, and Solana.
BNB price prediction
The 4H chart shows that the Binance Coin price has moved sideways in the past few days. Looking back, the coin has struggled moving above the important resistance at $337, the highest point on August 9 2022. The coin has also failed to move above this level in February, March, and April this year.
BNB coin price has moved slightly below the 25-period and 50-period moving averages. Volume has dropped after peaking in November 2022. Therefore, the outlook of Binance Coin will likely continue falling below the key support at $300. A move below this level will open the possibility of the coin drop to the key support at $265.7.
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