Since August, the market has been trending up and down in phases. However, during each phase there have been exceptions defying the larger trend. Cardano, Solana, Avalanche, Fantom, and Cosmos were some of those tough pieces. As the market continues to consolidate, another alternative has caught the attention of traders and investors.
Tezos recently recovered high returns for market participants. This is possibly the only “top” alt that trades in green for 4 consecutive days. Indeed, its price has appreciated by more than 25% in just 24 hours. For context, the earnings of the other top alts were mostly hovering in the 1% to 2% range at the time of publication.
What supported the rise of XTZ
Grid-related upgrades and new launches on the grid have, on the whole, acted as catalysts. Tezos, as such, is a self-modifying blockchain. In essence, it is possible to upgrade the network without hardforks.
The last Grenade the upgrade was implemented last month and the aforementioned upgrade improvements include reduced blocking time and gas consumption.
The reduction in transaction costs was successful in attracting new users to the network and, in retrospect, had a positive impact on the price. Additionally, earlier this month Homebase – a protocol for creating DAOs, was launched on the Tezos blockchain.
Now, this would allow users and developers to train several other entities using the smart contract function of the network. Not to mention that asset lending services were also recently launched on the Tezos network through its partnership with the DeFi EQIFI platform.
Additionally, at the time of publication, official data from Tezos showed that 76.16% of the total supply was on the line. Staking essentially limited the number of tokens available in the market and helped to put upward pressure on prices.
Is the rally too good to last
Well, at the time of writing, the state of most of Tezos’ on-chain metrics seemed to be withering. As the price of the alt tried to climb towards its May ATH of $ 8.4, network usage was quite insufficient.
Consider the value of the network to the value of the transaction. This ratio explicitly designates the relationship between market capitalization and transfer volumes. Whenever NVT is high, it indicates that the network value exceeds the value transferred over the network.
Such trends tend to rub off quite positively on the valuation of any alt. During the May alt rally, the same was running in the 100-200 range, but had been below 40 since the second week of September.
Alt dominance has also seen a drop from 0.3% to 0.27% recently, indicating that it has lost its say in the total crypto market cap. Likewise, the state of the transfer value has also been quite underfed.
Keeping in mind the state of the aforementioned metrics, it can be said that the next few days could end up being a bit difficult for the alt. However, it should be noted that its development activity has continued at a fairly decent pace lately.
In fact, Tezos is catching up with Ethereum’s dominance in the DeFi space and has around 135 projects and dApps in development on its network.
Additionally, cryptocurrency companies in Switzerland have worked with Tezos to launch tokenized assets such as popular stocks on its blockchain. The same would act as a respite from the future amid the changing and competitive environment. Thus, the short-term setbacks would end up being overshadowed by the favorable long-term outlook.