Tezos sees increased network usage in Q2 while XTZ targets 30% gai…

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Tezos enjoyed an increase in its network activity, but XTZ's breakout from a bullish pattern might fail. — Tezos enjoyed an increase in its network activity, but XTZ’s breakout from a bullish pattern might fail. Image from freepik and cryptologos

NEW DELHI (CoinChapter.com) — Tezos blockchain recorded significantly increased network usage on a year-on-year basis, per a report by data insights website Messari.

The report highlighted that the Tezos blockchain experienced a 12% increase from Q3 2021 in smart contract calls and a 94% increase in transactions year over year. In detail, Q2 2022 saw an average of 4.4 million smart contract calls and 3.7 million monthly transactions on Tezos.

For the Tezos network, network usage is composed of smart contract calls and transactions.

*Tezos network usage has steadily increased over the past months. Source: Messari report*

In addition, the number of accounts on the Tezos network has grown month over month for the last year. But, the number of new accounts has dropped steadily since Sept 2021. In H1 2022, developer activity on the Tezos platform is up 288% from H1 2021.

Also Read: Celsius files for bankruptcy – what does it mean for DeFi?

Moreover, XTZ staking on the Tezos network maintained a high, consistent rate of 75% – 77% throughout Q2 2022. 80% of the total staked XTZ came from delegators, and validators staked the remaining tokens.

Meanwhile, Tezos has created a strong DeFi ecosystem with a commanding presence in the NFT sector.

*TVL shares of various DeFi projects on the Tezos network. Source: Messari report*

Youves, a synthetic asset protocol, enjoyed the lion’s share ($14 million) of the Tezos TVL, with decentralized exchange Liquidity-Baking in the second place with a TVL of $13 million. Tezos’ TVL at Q2 2022 close was $41 million, making it 50th in TVL per DeFiLlama data.

XTZ Paints A Weak Breakout From Ascending Triangle Pattern

Meanwhile, XTZ prices have broken above a bullish continuation pattern called the ascending triangle. A horizontal trendline that connects swing highs and an ascending trendline connecting swing lows forms an ascending triangle pattern. Volume helps determine if a breakout is strong.

In an ideal world, buyers would enter the market as the trendlines close the gap, pushing prices above horizontal resistance with heavy volumes. Unfortunately, a low-volume breakout on the upside will likely fail, resulting in a pullback.

XTZ prices broke out of an ascending triangle pattern. Source: Tradingview.com

Per the rules of technical analysis, the price target for a breakout is equal to the triangle’s height at its thickest point. Therefore, XTZ prices might rise more than 30% from their current level to $2.26.

Also Read: XTZ hits four-week high after Tether deploys USDT on Tezos.

But, XTZ’s volumes do not support the breakout. The altcoin’s declining volumes indicate dwindling investor interest, which might result in XTZ prices moving back inside the pattern to chart a false breakout.

At writing, XTZ was trading at $1.71, up 1.8% on the day.

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