3 reasons why Tezos (XTZ) price broke its downtrend with a 50% rally
2021 has been a breakout year for the cryptocurrency market and aside from Bitcoin price soaring to new highs, the emergence of a vast decentralized finance (DeFi) ecosystem and the rising popularity of nonfungible tokens (NFTs) has thrust blockchain technology into the mainstream in a way that looks guaranteed to ensure mass adoption.
One project that has benefited from its focus on NFTs and the ongoing green revolution is Tezos (XTZ), a layer-one smart contract protocol that is capable of evolving its network without needing to undergo a hard fork.
Data from Cointelegraph Markets Pro and TradingView shows that after hitting a low of $3.23 on Dec. 3, the price of XTZ reversed course, gaining 68% to reach an intraday high of $5.45.
Three reasons for the price recovery seen in Tezos include the launch of Ubisoft NFTs on the Tezos blockchain, the projects' focus on creating an environmentally friendly blockchain platform and rising transactions and protocol revenue on the Tezos network.
Partnership with Ubisoft
The most recent development for Tezos that really got the price moving was the announcement of a significant partnership with video game maker Ubisoft. The gaming company is launching Ubisoft Quartz, a platform where users can acquire unique NFTs called Digits which can be used in game and and the platform will utilize Tezos blockchain.
[email protected] Quartz is built on @Tezos, an energy-efficient and self-upgradable Proof of Stake blockchain.Learn more at https://t.co/MzfgmL4IrX#Tezos #CleanNFT #BlockchainEvolved https://t.co/XlSEZeVlmM— Tezos (@tezos) December 7, 2021
Blockchain-based gaming has emerged as one of the hottest sectors of the cryptocurrency ecosystem in the second half of 2021 and a partnership with one of the largest video game makers in the world could lead to long-term bullish outcomes for Tezos.
The beta for Ubisoft Quartz is scheduled to launch on Dec. 9 and will be open to players of Tom Clancy’s Ghost Recon: Breakpoint. Players who meet certain criteria will be able to claim three free cosmetic NFT drops for being early adopters of the platform.
Focus on environmental sustainability
Another reason for the growing strength of Tezos is the protocol's focus on creating an environmentally friendly and sustainable blockchain network. The network utilizes a proof of stake consensus mechanism that is known to offer an energy-efficient alternative to more traditional proof of work blockchains such as Bitcoin (BTC).
According to a report released by the project, “the total annual carbon footprint of the Tezos blockchain is equivalent to the average energy footprint of 17 global citizens.”
Reducing the energy required to operate the Tezos network has been a goal of the project for some time which has resulted in a 70% increase in energy efficiency on a per-transaction basis for the network in 2021 resulting in the “electricity requirement per transaction being less than 30% in 2021 than what it was in 2020.”
Transaction volumes and revenues rise
In just the past few days, the Tezos network has seen an increase in transaction volume and protocol revenue as each spiked to the highest levels seen in 2021.
As seen in the graph above, the transaction volume on Tezos surged to a record-high $369 million on Dec. 3, which could be ae hint that some investors had caught wind of the Ubisoft news.
The jump in activity and revenue came as the project announced the completion of its Hangzhou upgrade, the 8th protocol upgrade for the Tezos network which demonstrated the project’s ability to self-amend and upgrade without the need to conduct a hard fork.
VORTECS™ data from Cointelegraph Markets Pro began to detect a bullish outlook for XTZ on Dec. 5, prior to the recent price rise.
The VORTECS™ Score, exclusive to Cointelegraph, is an algorithmic comparison of historical and current market conditions derived from a combination of data points including market sentiment, trading volume, recent price movements and Twitter activity.
As seen in the chart above, the VORTECS™ Score for XTZ began to pick up on Dec. 4 and reached a high of 87 on Dec. 5, around 21 hours before the price increased 49% over the next two days.
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