The native token of the BNB chain, BNB, is more than 2.5% down in the last 24 hours and continues its slide from a new highlight of all over $ 1,300 registered earlier this week.
BNB rose 129% in the past year and surpassed both Bitcoin and Ether, which renewed momentum in the BNB chain ecosystem started a new wave of capital rotation.
Trade volatility remains high, with token fluctuating within a range of $ 62 from 9 to 10 October, before closing to $ 1,250, according to Coindesk Research’s technical analysis model.
Jack O’Holleran, CEO of Skalse Labs, told Coindesk that the recent wave seems to be driven by Binance’s scale and uses reaching the hype rather than hype.
“We are in a phase of the cycle that is focused on range over tech,” he said. “Distribution is the key factor that drives growth right now. This range benefit is direct to translate into adoption, with $ 14.8 billion in influx last quarter and BNB chain activity that waves.”
Jasper de Maere, a strategist at Wintermute, compared the current rally with Solana’s late 2024 cycle in a statement to Coindesk, where price gains in a LAG-1 base token triggered a wave of liquidity across the ecosystem.
“BNB’s rally, driven by gas fees, rwa incentives and liquidity programs, ignited a wave of activity on the chain as capital rotated to yield and meme sectors, cake, hena, honey and manta among the most important recipients,” he wrote.
The pattern follows what the maers call the “L1 wealth effect” when the rising token prices drive USD gains reinvested in surrounding protocols.
“As long as the BNB prices last near heights, and the bridge -affected capital does not leave, recycling will continue, the liquidity will simply rotate between sectors (memes → defi → yield) instead of leaving the chain,” he added. “Only when the outflow accelerates or the breaks of trust really does the loop end.”
Still, signs of exhaustion may arise if stableecoin balances fall or capital begins to flow out of the BNB chain. Currently, the ecosystem seems to recycle wealth internally and repeat Solana’s previous track.
“The wealth effect does not die when the quantities are slow; it ends when money leaves,” they concluded.
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