- Elastos token has pulled back slightly from its highest point last week.
- The coin has formed a bullish pennant pattern on the daily chart.
- The developers announced plans for BeL2, a Bitcoin scaling platform.
Elastos (ELA) price consolidated after going through a spectacular rally last week. The token was trading at $4.40 on Wednesday, lower than this month’s high of $6.91. This price is still much higher than this month’s low of $0.1802, meaning it has jumped by more than 2,400%.
Why did ELA token soar?
Elastos is a blockchain project that aims to be the premier destination for developers building Web3 applications in areas like finance, gaming, non-fungible tokens (NFT), and infrastructure.
Elastos has grown over the years, helped by key partnerships by companies like Alibaba Cloud, Tencent Cloud, and Celo. Some of the networks in its platform are Elastos Name Service, Pasar, and Elacity, among others.
Elastos is still a relatively small player in the blockchain industry. For example, according to DeFi Llama, it has a Total Value Locked (TVL) of just $1.9 million. The only DeFi dApps tracked by the site are Giide Finance, Filda, and Eik.
The developers are now aiming to grow the platform by launching BeL2, a layer-2 network for Bitcoin, the biggest crypto in the world. A layer 2 network is a sidechain that handles transactions outside of the main network.
Layer-2 platforms have been highly successful in Ethereum’s network. Some of the top L2 networks in the industry are Optimism, Arbitrum, and Polygon. These networks solve key challenges by boosting transaction speeds and lowering costs.
The other benefit for Elastos BeL2 is that the network will help Bitcoin holders to generate passive income through staking. Staking allows people to make money by just holding their cryptocurrencies.
Elastos price aims to benefit as Bitcoin price is expected to rise in the next few months. Some of the tailwinds in the industry are the upcoming interest rate cuts, an ETF approval, and halving.
In most cases, cryptocurrencies with Bitcoin scaling features tend to do well when BTC is soaring. For example, Stacks (STX) and Internet Computer (ICP) jumped sharply as Bitcoin price soared.
Elastos price forecast
Turning to the daily chart, we see that the ELA price went parabolic after unveiling BeL2 network last week. As a result, the token has remained above the 50-day and 25-day Exponential Moving Averages (EMA), which is a positive sign.
Another sign is that the coin has formed a bullish pennant pattern. In price action analysis, this pattern is one of the most positive signs. It is characterized by a flag pole and a triangle-like pattern.
Therefore, there is a likelihood that ELA price will bounce back in the coming days as buyers target the psychological point at $5.0. A move above that level could see it surge to the YTD high of $6.91.
