Značka: Scalability

Ascending channel pattern sets Polygon (MATIC) up for a potential 30% rally

Polygon prices look poised to rise by at least 30% in the wake of a key Jan. 18 upgrade that would push a considerable portion of its native MATIC token out of circulation.Dubbed EIP-1559, the improvement proposal originally came to light as part of Ethereum’s so-called London Hard Fork upgrade on Aug. 5. The proposal effectively started destroying, or “burning,” a part of the fees paid to miners via Ether (ETH).Traders and investors raised their bids for Ether before and after the EIP-1559 upgrade, noting that it made Ether a deflationary asset for the first time in history. For example, a model created by Ethereum co-founder Justin Drake claimed that EIP-1559 would reduce Ether’s annual supply by 1.6 million ETH.MATIC looks for new record highsPolygon, which acts as a layer-2 protocol built to scale Ethereum’s prevailing scalability issues, rolled out a testing implementation of EIP-1559 on Dec. 14, 2021. After the test net launch, MATIC price rallied by almost 30% to $2.35, which includes a brief run-up to its record high near $3.MATIC/USD daily price chart. Source: TradingViewIn theory, a lower supply against a rising demand would make the asset more valuable in the eyes of its bidder. This classic economic reference has assisted in boosting demand for cryptocurrencies like Bitcoin (BTC) before. Issuance would be halved every four years against a limited supply cap of 21 million units. This begs the question, could the MATIC price rally in the same way? Mineplex co-founder Alexander Mamasidikov thinks yes.Mamasidikov told Cointelegraph that EIP-1559 would impact MATIC price positively, adding that it could easily rally toward its current record high following the technical upgrade.”In periods of price recovery, investors are often on the lookout for both technical and fundamental features to hang onto in order to back a coin, and Polygon brandishes both,” he said, adding: “While Polygon remains a better version of Ethereum in terms of lower transaction costs, it is also the delight of retail investors with respect to its low price at this time when compared with Ethereum or other smart contract networks.”What do Polygon’s technicals say?MATIC has been trending higher inside an ascending channel pattern since July 2021, confirmed by at least two reactive highs and two reactive lows.The token recently retested the channel’s lower trendline around $1.89 as support, a move that was followed up with a bullish retracement toward $2.50. It now acting as resistance and the $2.50 level also turned out to be near the 1.00 Fib line near $2.44.MATIC/USD daily price chart featuring ascending channel pattern. Source: TradingViewThat being said, MATIC may attempt a break above the $2.44-resistance around the EIP-1559 upgrade on Jan. 18. The move would set itself on a course to test its interim upside target near $3, which is approximately a 30% jump.Related: Polygon network activity spikes as NFT sales reach new heightMeanwhile, if the EIP-1559 factor plays out any longer than anticipated, MATIC price may even attempt an extended run-up toward the 1.618 Fib line around $3.52. Conversely, a rejection at $2.44 could have Polygon retest the ascending channel support for a negative breakout.Such a move would risk invalidating the bullish setup, as discussed above. All of this is in conjunction with exposing MATIC to a correction toward $1.77 or lower.The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

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ZK-rollups step into the limelight after the quest to scale Ethereum evolves

Scalability on the Ethereum (ETH) network has been a point of contention within the cryptocurrency ecosystem for years, primarily due to high fees and network congestion during periods of peak demand.The latest solution to emerge as the final fix to Ethereum’s scalability woes are Zero-knowledge rollups (ZK rollups), a form of scaling that runs computations off-chain and submits them on-chain via a validity proof. Zk rollup season — cryptowarlord.eth ( ͡° ͜ʖ ͡°) (@CryptoWarlordd) December 7, 2021Earlier in the year, protocols that opted to use optimistic rollups such as Optimism and Arbitrum dominated the headlines and were touted as the best solution to scaling on Ethereum, but aside from Arbitrum, the hype for those protocols has quieted down and traders have pointed out that even optimistic rollups have higher than desirable fees when the network is under peak demand.Early successes in 2021At the same time that optimistic rollup solutions were in the spotlight, protocols that adopted the ZK rollups model quietly demonstrated their capabilities.dYdX, a decentralized perpetual and futures exchange, was one of the earliest adopters of ZK-rollup technology through its partnership with StarkWare, whose StarkNet network is a permissionless decentralized ZK-Rollup.To date, the platform has seen a decent amount of success and at times managed to process a higher 24-hour trading volume than Coinbase. Loopring (LRC) is another protocol that has utilized ZK-rollups to decrease transaction costs and speed up its throughput capabilities, which has helped drive the price of LRC to a new all-time high of $3.83 in early November. LRC/USDT 1-day chart. Source: TradingViewRelated: Ethereum layer-two TVL reaches all-time highZK-rollups could be the next “rotation” for tradersFollowing last week’s sharp market-wide sell-off, ZK-rollups have reemerged as a buzzword in crypto sector. Polygon, a layer-two platform for the Ethereum network, made headlines with the announced acquisition of Mir, a project developing two subcategories of zero-knowledge proofs known as PLONK and Halo. The 250 million MATIC token investment by Polygon, which already offers some of the lowest fees of any protocol on the Ethereum network, was done in an effort “to explore and encourage all meaningful scaling approaches and technologies at this stage,” according to Polygon co-founder Sandeep Nailwal.Another much-anticipated protocol that has been gaining traction recently is zkSync, a scaling solution created by Matter Labs that secured $50 million in a Series B round led by Andreessen Horowitz in early November.zkSync total deposits vs. total unique usersAccording to Digital Delphi, the two main projects that are live on zkSync is ZigZag, a decentralized exchange, and a funding platform called Gitcoin.Analysts at Delphi Digital said, “According to L2 fees, token swaps through ZigZag on zkSync have the lowest fees.”The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

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Terra becomes top-10 crypto: Classic 'bull pennant' setup paint $100 LUNA price target

Terra (LUNA) faces the prospects of hitting $100 in the coming weeks as it paints a classic bull pennant structure.In detail, Bull Pennants appear as the price trends inside a Triangle pattern after a strong move upside. Many analysts see it as a sign of bullish continuation, i.e., they think the instrument would eventually break above the Triangle’s upper trendline to resume its price rally higher.Additionally, the profit target of a Bull Pennant structure typically comes to be equal to the length equal to the size of the previous price rally, called Flagpole, when measured from the breakout point. As it appears, LUNA has been forming a similar pattern on its lower-timeframe chart.LUNA/USDT four-hour chart featuring Bull Pennant setup. Source: TradingViewConsidering the breakout happens at the point where the Bull Pennant trendlines converge — the apex — the ideal profit target comes out to be over $22, the Flagpole height. That puts LUNA on the road to almost $100.Supportive bullish catalystsThe bullish technical setup in the Terra market appeared as LUNA rallied nearly 65% in less than three weeks to become the tenth-largest cryptocurrency by market capitalization.The digital asset jumped past Dogecoin (DOGE) and Avalanche (AVAX) to value over $28.60 billion, almost 1.18% of the current total cryptocurrency market valuation of $2.30 trillion. Meanwhile, LUNA’s token price climbed from $43.50 to over $77 on Dec. 5, a new all-time high.LUNA circulating market capitalization. Source: MessariTraders took cues from Chiron Partners, a Hong Kong-based venture capitalist firm, that announced Wednesday that it had raised $50 million for a dedicated fund, dubbed Chiron Terra Fund I, to build decentralized finance (DeFi) and metaverse-linked nonfungible token (NFT) projects atop the Terra blockchain.Jake Cormack, chief operating officer at Chiron Partners, credited Terra’s growth potential behind their decision to choose them as their official public ledger, particularly after the blockchain’s recent Columbus-5 upgrade, which promises to enable higher scalability and greater cross-chain interoperability.Deflation FOMOIn detail, the Terra ecosystem consists of a family of stablecoins pegged to a growing list of fiat currencies and a mining token, LUNA. LUNA serves as a governance token, volatility absorption tool, and rewards catcher through “seigniorage” and transaction volumes. The volatility absorption feature, in particular, proves to be the most bullish case for LUNA. Notably, the Terra ecosystem maintains its stablecoins fiat-peg by burning LUNA tokens. In other words, if the price of Terra’s native stablecoin TerraUSD (UST) goes above $1, the protocol burns LUNA to mint more UST, thus bringing its value back to $1.Conversely, if the UST value goes below $1, the protocol swaps the stablecoin for LUNA to prop up its prices. With the Columbus-5 upgrade and Chiron’s $50-million fund promising to bring more projects to the Terra ecosystem, anticipations of more deflationary pressure on LUNA have been rising.$LUNA price hit a new high shortly after Terra’s Columbus-5 upgrade increased deflationary pressure on the token and integrated Terra with the Cosmos $ATOM ecosystem. https://t.co/vYimuTqo5r pic.twitter.com/59xJdZ2FiB— Cointelegraph Markets (@CointelegraphMT) October 6, 2021As Cointelegraph reported, UST stablecoin adoption is growing with its net supply hitting a new record high of $8.221 billion on Wednesday. On the other hand, according to TerraAnalytics, the Terra protocol has burned more than 104 million LUNA tokens ever since the Columbus-5 upgrade went live at the end of September. Talis’s $2.3M NFT marketplaceBullish cues for LUNA before the Chiron announcement came in the form of Talis. The startup raised $2.3 million in funding led by ParaFi Capital and Arrington Capital to build an NFT marketplace on the Terra blockchain.LUNA/USDT versus BTC/USD daily price chart. Source: TradingViewTwo days after the announcement, LUNA rose nearly 13% to reach its new all-time high despite a major correction in Bitcoin (BTC), Ether (ETH), and most other cryptocurrencies. The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

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