The price of Zilliqa has been in a strong bearish trend for the past few months. ZIL fell to a low of $0.020, its lowest level since November 2020. This means the coin is on track to lose most of the gains it made during the pandemic. It has crashed by more than 90% from its all-time high this year.
Why does ZIL crash?
Zilliqa is a leading blockchain pioneer who introduced the concept of sharding. Sharding improves the performance of a blockchain platform by breaking the blocks down into smaller units called shards.
In recent years, sharding has been embraced by various blockchains. Notably, Ethereum is expected to deploy the technology in 2023. After that, transaction speeds in the network will grow from less than 20 per second to thousands. Other networks that use sharding are Elrond, Near Protocol and Polkadot.
The price of Zilliqa has been in a strong bearish trend for the past few months due to several reasons. First, the performance of Metapolis, its metaverse as a service (MaaS), has not performed as widely expected when it launched in Miami. It’s not alone. Other metaverse projects such as Decentraland and Sandbox all underperformed.
Secondly, Zilliqa has not done well in the DeFi industry. A good way to measure this performance is by looking at the volume of assets locked into the network. It currently stands at $4.1 million with Zilswap having 99.96% market dominance. At its peak, Zilliqa had a TVL of over $200 million.
Third, Zilliqa’s performance in the Non-Fungible Token (NFT) industry. No major NFT collection has been launched in Zilliqa that could compete with Bored Ape Yacht Club and Otherdeed.
Finally, like other coins, the ZIL price has been hit by the ongoing collapse of FTX and Alameda and the earlier collapse of Terra. FTX was the second largest crypto exchange in the world.
Zilliqa price prediction
Zilliqa price chart by TradingView
So, it’s safe to Buy zilliqa? Looking at the weekly chart, we can see that ZIL price has been on a strong bearish trend. A closer look shows that it has formed a descending head-shoulder pattern. The current price is at the lower end of this pattern.
Zilliqa has fallen below all moving averages, while the Relative Strength Index (RSI) has fallen below the oversold level. The stochastic oscillator has also continued to fall. Therefore, the coin is likely to continue falling as sellers target the next key support level at $0.0100.
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