- XDC Network token has been one of the best-performing cryptocurrencies recently.
- This rally could be a short squeeze since there was no immediate XDC news.
XDC Network token was one of the best-performing cryptocurrencies on Wednesday. The token jumped to a high of $0.067, the highest level since August 2022. In all, XDC has surged by more than 227% from the lowest level this year.
What is XDC and why is it rising?
XDC Network is a layer-1 network in the blockchain industry that aims to become the best alternative to leading chains like Ethereum, Cardano, and Hedera Hashgraph. Some of its features are its low fees, strong security, and high scalability.
Developers in XDC Network can build decentralized finance (DeFi) applications. Also, they can take part in the tokenization industry, which is valued at billions of dollars. According to its website, some of the top networks powered by its technology are Datachain Foundation, Trada Token, Securrency, and Impel.
XDC, like other layer-1 networks, is facing numerous challenges. In addition to the ongoing regulatory concerns, there is the issue of competition. For one, the network is competing with existing layer-1 networks like Ethereum, Tron, and Solana.
At the same time, it is battling layer-2 networks that promise faster speeds, high reliability, and strong security. Some of the top layer-2 networks in the ecosystem are Arbitrum, Optimism, and Polygon.
Most of these networks are way ahead of XDC Network. For example, a look at its DeFi ecosystem shows that it has a Total Value Locked (TVL) of just $5.4 million. This is a rounding error of the giant $80 billion DeFi ecosystem.
It is unclear why XDC Network token is soaring since there have been no news about the network. A look at its social media platforms like Twitter and Discord shows no major news. Therefore, I believe that the coin is being pumped, which has led to fear of missing out (FOMO) among investors.
XDC Network price forecast
The daily chart shows that the XDC token price has been in a strong bullish trend in the past few weeks. In this period, the token has jumped above the important resistance level at $0.045, the highest level on April 165th.
XDC has jumped above the 50-day and 25-day moving averages. At the same time, important oscillators like the Relative Strength Index (RSI) and the Stochastic Oscillator have moved to the overbought level.
Therefore, I believe that risk/reward ratio is unfavourable for now. This means that buying at the current level is riskier than either avoiding or shorting the token. My price target for XDC Network is at the psychological level at $0.050.
