The price of Tezos (XTZ) is down over 15% this week. The reason for this price drop is the ongoing concerns about liquidity in the ecosystem. XTZ, meanwhile, fell to $0.76, its lowest level since 2020.
Although the coin has recovered somewhat and is trading at $0.79 per hour, this price is still down more than 90% from its all-time high.
XTZ Price Drops Despite Recent Update
Tezos is one of the oldest Proof-of-Stake (PoS) networks and a competitor to Ethereum. A special feature of this blockchain project is that there are no regular updates.
Tezos is known for several high profile partnerships. These include a sponsorship deal with Formula 1 Constructors’ Championship winner RedBull. The company also has a partnership with Manchester United football club.
Despite these partnerships, the XTZ network does not hold a significant market share in most sectors of the blockchain industry. For example, the total value of deposits on DeFi platforms in the ecosystem is only $42.9 million. The Youves platform has a dominance of 80.7%.
Tezos doesn’t play a major role in the Metaverse either. The only industry where this network has had some success is in NFTs. Data compiled by CryptoSlam shows that the trading volume of Tezos NFTs exceeds $57 million. But that’s not a lot: by comparison, Avalanche processed over $31 billion worth of NFTs.
The latest news from Tezos was the implementation of the 12th network upgrade dubbed Lima. With this upgrade, new features have been introduced in an effort to increase throughput and make the system more developer-friendly. It is achieved by separating validation and enforcement. Thus, each newly received block is validated before being transmitted to the peers.
However, it is unclear how this upgrade will drive adoption of the network for years to come. Additionally, competition in the industry is intensifying as platforms like Cronos and Avalanche continue to gain market share.
Tezos Price Prediction
The price chart shows that XTZ price is plummeting in 2022. It also broke below key support at $0.909, which was the lowest price on November 22. The price is below the moving average lines while the Relative Strength Index (RSI) and MACD continue to decline.
Therefore, the outlook for XTZ remains bearish. The next important price level is $0.50. A rise above the resistance at $1 would reverse the negative trend.
On this page we explain how to buy or short sell Tezos.