15 JAN 2022 (SAT)- Binance (BNB) Report Card

By quantdoge | Daily Crypto Risk Report | 15 Jan 2022


Investment Disclaimer:

  • I am not a registered investment, legal, or tax adviser or a broker/dealer, and all opinions expressed by me are from my research for educational purposes only.
  • Past performance presented here is not an indicator of future performance.
  • This post expresses my own opinion about the cryptocurrency mentioned herein and is not an offer to buy or sell, or a solicitation of any offer to buy or sell the cryptocurrency mentioned in this post.
  • I do hold a long position in BNB as a token holder.

1A. Top 3 Good News for BNB HODLERS !!!

2. How Binance Coin Performs Relative to Other Cryptos ?

Performance of All Cryptos Under Quantdoge Watchlist in 2021 (Sorted by % Return)

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BNB has undergone 1,174.51% return from USD 37.3946 to USD 476.5976 since 01 Jan 2021. BNB is the 11th best performing crypto assets among others here.

3. How Resilience Binance Coin Is Towards Bitcoin Crash Relative to Other Cryptos ?

Historically, all altcoins are somewhat dependent on Bitcoin price movement and it’s often the case where if Bitcoin falls, most altcoins would follow.

Top 3 Cryptos That Are Most Resilient To Bitcoin Crash During Each of BTC 4 Largest Crashes in 2021

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BNB has proven resilience against BTC crash in 0 out of the 4 instances.
During the last 4 BTC market crashes,
When BTC dropped by -13.47 %, BNB returned -31.88 % at 20 May 2021,
When BTC dropped by -13.13 %, BNB returned -8.83 % at 22 January 2021,
When BTC dropped by -12.16 %, BNB returned -10.44 % at 13 May 2021,
When BTC dropped by -11.39 %, BNB returned -19.39 % at 22 June 2021

4. Technical Analysis on Binance Coin

4.1. Volume Weighted Average Price (VWAP)

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VWAP is a technical indicator used by a trader to gauge the overall trend of an asset price movement. VWAP line (orange line) represents the volume-weighted average price (average price here is defined as the average of high, low and close prices) while close price line (blue line) represents the price when BNB is closed at the end of every single day. 

Whenever blue line (close price) is above orange line (VWAP), it indicates that the asset is gaining momentum and being traded higher than its average price level. This would represent a 'buy' opportunity for short-term momentum trader whom task is to trade following the trend while a longer term mean-revision trader might take it as a 'sell' opportunity, anticipating that the price of BNB (blue line) to fall to its average level (orange line).

Whenever blue line (close price) is below orange line (VWAP), it indicates that the asset is losing momentum and being traded lower than its average price level. This would represent a 'sell' opportunity for short-term momentum trader whom task is to trade following the trend while a longer term mean-revision trader might take it as a 'buy' opportunity, anticipating that the price of BNB (blue line) to rise to its average level (orange line).

As of 14 Jan 2022, VWAP is suggesting that BNB has gained a lot of momentum in the past week and is now trading above its monthly volume-weighted average price.

4.2. Moving Average Convergence Divergence (MACD)

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MACD is often used by trader as a momentum indicator. There are 2 lines that form the above charts, namely MACD (12, 26) lines and Signal(9) line, while the histogram is calculated by subtracting Signal (9) from MACD (12,26). Histogram would fall to the negative territory whenever MACD (12, 26) is trending at a lower level than Signal (9) and rise to the positive territory whenever MACD (12,26) is trending at a higher level than Signal (9).

MACD (12, 26) is computed by subtracting the 26-day exponential moving average (EMA) of BNB closing price from its 12-day EMA. 
Signal (9) on the other hand is calculated as the 9-day EMA of MACD (12,26). 

As MACD (12, 26) goes higher away from Signal (9), it signifies that BNB is gaining momentum and whenever it goes trends at a lower level than Signal (9),it signifies that BNB is losing momentum. 

As of 14 Jan 2022, MACD is suggesting that BNB has gained a lot of momentum over the past week

4.3. Bollinger Band

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Bollinger band is often being used by mean-reversion trader as a gauge to assess how undervalued or overvalued an asset is. Its chart made up of 4 lines, namely:

- SMA (20) (blue line), which is the 20-day simple moving average price of BNB
- Upper Band (orange line), which is computed by adding 2 standard deviations of BNB on SMA (20)
- Lower Band (red line) , which is computed by subtracting 2 standard deviations of BNB from SMA (20)
- Close (green line), which is the daily closing price of BNB

Whenever close line (green) touches the lower band (red), it indicates that BNB is corrected too much and is being traded at an undervalued level, representing a 'buy' opportunity. On the other hand, whenever close line (green) touches the upper band (orange), it indicates that BNB is gaining too much momentum and is being traded at an overvalued level, thus indicating a 'sell' opportunity. 

As of 14 Jan 2022, Bollinger Band is suggesting that BNB has rebound back to its "fair value" zone, and is now trading at a price range that is neither overvalued nor undervalued.

4.4. Relative Strength Index (RSI)

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Just like Bollinger Band, Relative Strength Index is often being used by mean-reversion trader as a gauge to assess how undervalued or overvalued an asset is. There are 2 psychological levels, i.e. 30 and 70 in RSI. Whenever the RSI reaches 30, it indicates that BNB is corrected too much and is being traded at an undervalued level, representing a 'buy' opportunity. On the other hand, whenever RSI reaches 70, it indicates that BNB is gaining too much momentum and is being traded at an overvalued level, thus indicating a 'sell' opportunity. 

As of 14 Jan 2022, RSI is suggesting that BNB is neither overbought nor oversold.

4.5. Price and Volume Analysis

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The recent rise in BNB price was accompanied by large trading volumes from 7 Jan 2022 to 10 Jan 2022, suggesting that many buyers took the opportunity to buy the dip whenever BNB was under USD 450. However, the daily active trading volume subsided after 10 Jan 2022 where BNB price consolidated to the present price of USD 494. The chance for BNB to shoot pass the psychological resistance of USD 500 now hinges on whether there would be large volume of buy-in for the next few days. 

Based on the technical analysis presented above, quantdoge is neutral on BNB, but I could be wrong, hence please make your careful due diligence before making any financial decision. 

5. Binance Coin Risk Profile

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Based on the 100-day 95% historical Value-at-Risk (VaR) profile of Binance Coin defined above, the probability distribution chart of BNB has tilted left, with greater probability of losing more than 5% daily but lesser probability of earning more than 5% daily, indicating that BNB trade is becoming riskier now as compared to 10 days ago on 6 Jan 2022. However, I could be wrong, hence please make your careful due diligence before making any financial decision.

6. Price Simulation for Binance Coin

How did quantdoge simulation perform vs the actual BNB price movement over the last week ?

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Over the last 7 days, BNB is trading above the median range of all quantdoge simulations, indicating that BNB is slightly overbought.

7. BNB Community Analytics

Number of BNB Followers In The Last 30 Days

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In the last 30 days alone, Binance followers increased 5.94% from 6,682,132 to 7,079,338 on Twitter and grown 4.0 % from 745,722 to 775,519 on Reddit.

Daily increment of Binance Twitter followers peaked on 06 Jan 2022 and its daily increment of Reddit followers peaked on 05 Jan 2022.

There are on average 17,905 new followers daily on Binance Twitter and 1,063 new subscribers daily on its Reddit.

8. Google Trends Analytics

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binance reached its peak in Google Search on 2021-05-09 with a Google Score of 15
Over the last quarter, binance Google Score has decreased 20.0 % from 7.5 to 6.0
Over the last 6 months, binance Google Score has increased 25.0 % from 4.8 to 6.0

9. Developer Activity Analytics

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Fork

Fork refers to the amount of time where the Github repo of current cryptocurrency is being copied. Higher fork number could mean that this cryptocurrency project is getting more interest in the developers community who likes to explore more on the deep technical of this project.

Binance forks increased 3.4% from 1,971 to 2,038 in the past year.

Star

Star refers to the number of developers who bookmark the Github repo of current cryptocurrency. Higher star number could mean that this cryptocurrency project is getting more general interest in the developers community.

Binance stars increased 12.81% from 3,169 to 3,575 in the past year.

Pull Request

Pull request contributor refers to developer who has made a successful improvements/ modifications on the Github repo of this current cryptocurrency project. Higher number of pull request contributors could mean that there is a high number of commitment given by developers to this cryptocurrency project.

However, a low number also could mean that the developer community of this project applies a strict standard when it comes to code review, so only developers who have published a high quality code with highly impactful features got approved.

Binance pull request contributors remained stagnant at 26 in the past year.

If you like my analysis and articles, please follow me at @quantdoge for daily updates.

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quantdoge
quantdoge

Data scientist in crypto and blockchain space.


Daily Crypto Risk Report
Daily Crypto Risk Report

This blog was created by quantdoge, a data scientist in the cryptocurrency and blockchain space to publish daily risk reports on different cryptocurrencies. All published reports in this blog were analyzed with in-house algorithmic trading and quantitative risk management technology. ** Investment disclaimer: ** I am not a registered investment, legal, or tax adviser or a broker/dealer, and all opinions expressed by me are from my research for educational purposes only.

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