Bitget App
Trade smarter
Buy cryptoMarketsTradeFuturesCopyBotsEarn

Zksync (ZK) Faces Network-Wide Decline, Extending Losses

BeInCryptoBeInCrypto2024/07/25 09:23
By:BeInCrypto

ZKsync (ZK) has experienced a significant downturn in network activity over the past few months. The Layer-2  (L2)protocol has witnessed a sharp decline in user demand, reaching its lowest point year-to-date .

Also, the network’s DeFi Total Value Locked (TVL) has contracted to its lowest level since April 2023. These events coincide with a downtrend in ZK’s price.

ZKsync Struggles To Keep Users

An on-chain assessment of activity on the ZKsync network reveals a steady decline in user demand since June 23. According to information from The Block’s data dashboard, the network’s daily active addresses observed using a seven-day moving average have since dropped by 66%.

Due to the decline in the number of active unique addresses on ZKsync, the daily count of transactions completed on it has also plummeted. According to data from The Block, this has trended downward since February 28. On July 23, it plunged to its year-to-date low of 293,000. 

A decline in daily active addresses and transaction counts on ZKsync indicates a decrease in user activity on the platform. This highlights an obvious decline in interest in using the L2 for things like NFT trading or DeFi activity.

For example, while the broader market rally has led to an uptick in the total value of assets locked (TVL) across multiple networks in the last month, ZKsync’s TVL has declined.

Read More: What Is zkSync?

At press time, the network’s TVL was at its lowest level  since April 2023, at $96 million

ZK Price Prediction: L2 Token Witnesses Growing Bearish Bias

ZKsync’s native token, ZK, fell to an all-time low of $0.13 on July 5. Although it has since rallied by 21%, the altcoin is poised to lose some of these gains. As of this writing, ZK trades at $0.15, having declined by almost 10% in the past seven days.

Its Relative Strength Index ( RSI ) confirms the decline in ZK’s buying pressure. At press time, the indicator is 42.10 below its 50-neutral line and in a downtrend. 

This indicator measures an asset’s overbought and oversold market conditions. It ranges between 0 and 100, with values above 70 indicating that the asset might be overbought and a price correction or reversal might occur. On the other hand, RSI values below 30 suggest that the asset might be oversold, and a rebound could happen.

At 42.10, ZK’s RSI suggests that selling pressure outweighs buying activity, highlighting that it is at risk of a potential decline. 

Also, readings from ZK’s Directional Movement Index (DMI) reveal that its negative directional indicator (-DI) has crossed above its positive directional indicator (+DI).

An asset’s DMI measures its trend strength and direction. When the -DI intersects the +DI, it signals a shift in the market trend from bullish to bearish. It suggests that the asset’s downtrend is becoming stronger. 

Read More: What are Zero-Knowledge Proofs? Securing Growth for Web3 Apps

If this trend continues, ZK’s price might fall to its all-time low of $0.13 or even trade below it at $0.09.

However, if buying pressure regains momentum, ZK’s price may climb up to $0.17 . 

0

Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

You may also like

When Will FTX Refunds, Alleged to Revitalize the Cryptocurrency Market, Start?

FTX refunds, where payments will be made in dollars, could spark movement in the cryptocurrency market.

Bitcoinsistemi2024/09/07 13:54

‌Spot copy trading

More
AIOnline
AIOnline
insight1000/1000
11318.51%
ROI
Total profit $57724.41
HappyPlanets
HappyPlanets
insight500/500
18780.56%
ROI
Total profit $37561.09

Bot copy trading

More
TopTrader85
TopTrader85
insight150/150
$13284.03
Total profit
Total subscriber profits $137.16
GridOnly
GridOnly
insight150/150
$9015.2
Total profit
Total subscriber profits $107.17