Key Takeaways
- More than 5.37 million Tezos-related engagements were registered on social media over the past 24 hours.
- The spike in social interactions seems to be related to a new set of features that will support Tezos-based DAOs.
- XTZ’s market value was able to rebound by more than 33% after a steep correction and could be poised for more upside momentum.
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Tezos (XTZ) appears to be leading the recovery in the cryptocurrency market after a team of developers announced that users will soon be able to create DAOs on the blockchain.
Tezos Expands to Meet Market’s Needs
Tezos saw its market value fall by more than 20% in the past 24 hours. XTZ crashed from a high of $2.90 to a low of $2.30, generating nearly $1.80 million in liquidations across the board.
While prices tumbled, the number of XTZ-related mentions on different social media networks skyrocketed. LunarCRUSH registered over 5.37 million social engagements, a 157% increase.
The positive sentiment seems related to the newly announced Homebase project, which will allow anyone to create Decentralized Autonomous Organizations (DAOs) on the Tezos blockchain. DAOs allow participants to create, vote on, and fund proposals, a feature already seen on several other blockchains.
The news was welcomed by the cryptocurrency community and served as a catalyst for XTZ’s recovery.
Tezos Recovers Promptly
The spike in Tezos’s social media visibility seems to have encouraged market participants to take advantage of the downward price action by buying XTZ tokens at a discount. The significant increase in buying pressure allowed XTZ to recover all losses incurred, driving its market value upwards by more than 33%.
From a technical perspective, Tezos rebounded from the middle trendline of a descending parallel channel that has formed within its daily chart since late April 2020.
Every time that XTZ has risen to this technical formation’s upper boundary since then, it has been rejected and retraced to the pattern’s middle or lower edge. From this point on, it has tended to rebound, consistent with the characteristics of a parallel channel.
A further increase in demand for Tezos around the current price levels may allow it to finally break through the channel’s upper trendline. By slicing through this significant resistance barrier, the odds of another 39% upswing towards XTZ’s previous all-time high of $4.50 will increase.
It is worth noting that the bullish outlook will only come to fruition if Tezos turns the $3.20 resistance into support. Failing to do so could result in a rejection that sends the cryptocurrency’s price to retest the channel’s middle trendline at $2.20.
At the time of writing this author held Bitcoin and Ethereum.
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