- Zilliqa token price has risen by over 58% from the YTD low.
- The network was halted on Monday amid a technical issue.
- Its fundamentals are significantly weak compared to other chains.
Zilliqa (ZIL) price crawled back on Tuesday morning a day after the network went through a major technical issue. The token was trading at $0.0228, much higher than Monday’s low of $0.021. It remains 58% above the lowest point this year.
Zilliqa ecosystem woes
Zilliqa is a pioneer in the blockchain industry. It is well-known for introducing the concept of sharding, which helps to supercharge a chain’s speed by slicing blocks into smaller parts known as shards.
This technology has been used to power popular networks like Near Protocol and MultiverseX, formerly known as Elrond. Ethereum is working to integrate its technology into network.
Read more: How to buy Zilliqa.
The challenge for Zilliqa is that it has not gained mass and developer adoption in the past few years. A closer look at the DeFi network shows that it has a small ecosystem. It has just five DeFi dApps, with the biggest one being ZilSwap, which has a TVL of over $3.86 million.
However, a closer look at its transaction volume shows that it has died. According to CoinMarketCap, the total volume in the ZilSwap in the past 24 hours was zero.
The other networks in Zilliqa are Avely Finance, PlunderSwap, and Ionise. Avely has a TVL of just $1.5 million while the rest have negligible assets. As a result, the total TVL in the ecosystem remains at $4.35 million, making it smaller than most networks. It is also smaller than newer blockchains like Sui, Sei, and Base.
Therefore, all these metrics raise questions about why Zilliqa has a market cap of over $397 million, which is a lot if money.
The most recent ZIL news was that its network went through a hitch on Monday that stopped block production. The developers worked on the issue and it resumed production. A closer look at the number of unique user addresses in Zilliqa has plunged. The daily additions has fallen to less than 1,000.
Zilliqa price forecast
The daily chart shows that the ZIL token price has been in an uptrend in the past few months. This jump is in line with the ongoing cryptocurrency rally. The token has formed an ascending channel, which is shown in green.
Zilliqa price has also moved above the 50-day moving average. However, the Relative Strength Index (RSI) and the Stochastic Oscillator have drifted downwards. Therefore, the outlook for ZIL is still bullish as bulls target the upper side of the channel at $0.025. However, I believe that there are better tokens to buy that have stronger momentum.
