Tezos (XTZ) turned away from its downtrend on Tuesday to an impressive 51% after news that Ubisoft’s new NFT platform is built on Tezos blockchain went viral. Tezos price is up approximately 30% in the past 24 hours. Its daily trading volume has rallied a massive 498% to $1,476,629,835 in the past 24 hours with the market capitalization leaping 27% to $4.65 billion. XTZ is now position at 40 on CoinMarketCap and teeters around $5.4550.
3 Reasons Behind XTZ’s Rally
The year 2021 has been great for the crypto industry and apart from market leaders, Bitcoin and Ethereum, recording new all-time highs (ATHs), the rising popularity if Non-fungible tokens (NFTs) coupled with the emergence of decentralised finance (DeFi) blockchain networks has increased the mass adoption of the blockchain technology.
The project behind the Tezos network has significantly benefited, particularly with its focus on NFTs and the environmental concerns that have always gripped the crypto space. As a layer 1 smart contract protocol, Tezos (XTZ) is capable of improving its network without requiring a hard fork.
According to the data from TradingView, Tezos bounced from the December low around $3.45 rising 70% to a high of $5.894 on Tuesday. Three things have been credited for the recent uptick in XTZ/USD price:
- The launch of Ubisoft NFTs on the Tezos blockchain
Tezos has partnered with Ubisoft, one of the world’s largest digital gaming companies, which is launching its new Ubisoft Quartz NFT that will be built on the Tezos blockchain. Announcing this partnership, the Tezos team tweeted:
— Tezos (@tezos) December 7, 2021
Games based on blockchain platforms have gained traction in 2021 and a partnership with one of the largest video game makers in the world could lead to long-term bullish outcomes for Tezos (XTZ). The beta version of the Ubisoft Quartz is scheduled for launch tomorrow December 09. It will be open to players of Tom Clancy’s Ghost Recon: Breakpoint and players who meet certain criteria will be able to claim three free cosmetic NFTs from drops for early adopters of the platform.
- Focus on environmental protection
Tezo’s focus on creating an environmentally friendly and sustainable blockchain network has also reinforced the rally in XTZ price. The network’s proof-of-stake consensus mechanism offers an energy-efficient alternative to energy intensive proof-of-work protocols such as Bitcoin (BTC).
According to their latest report “the total annual carbon footprint of the Tezos blockchain is equivalent to the average energy footprint of 17 global citizens.” The company behind the Tezos network has a goal of reducing the energy required to operate the network. It has a reported a 70% increase in energy efficiency on a per-transaction basis for the network in 2021, this is 30% less than in was in 2020.
- Increase in revenues and transaction volumes
There has been a spike in transaction volume and protocol revenues on the Tezos network in the recent past. The protocol revenue has hit its highest in 2021. From the graph below, it can be seen that the daily XTZ trading volume peaked at $369 million on December 03, which is a hint that some investors had caught wind of the Ubisoft news.
The spike in activity and revenue came as Tezos announced the completion of its Hangzhou upgrade. This is the eighth protocol upgrade for the Tezos network demonstrating the project’s ability to self-amend and self-upgrade without the need to conduct a hard fork.
Tezos price rally aims for $7
As XTZ/USD price turned away from the downtrend, it rallied in a price action that saw it flip several resistances into support including the $4.0 psychological level, the 200-day Simple Moving Average at $4.67 and the $5.0 psychological level
XTZ/USD Daily Chart
The rally was stopped by the $5.83 major resistance level. A rise above this level could trigger massive buy orders that are likely to push Tezos upwards $7.00 psychological level.
Note that the parabolic SAR has just flipped from negative to positive and moved below the price suggesting that XTZ market momentum is now bullish.
Moreover, the MACD has just sent a buy Tezos signal on the daily chart. This happened today when the 26-day Exponential Movign Average (EMA) (blue line) crossed above the 26-day EMA (orange) accentuating the bullish narrative .
On the flipside, a close below the $5.40 level could see XTZ price plunge below the $5.0 psychological level to tag the 200-day SMA around $4.671. Losing the 200-day SMA could trigger massive sell orders that might see the price of the DeFi coin drop towards the December 04 low below $3.87.
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