Zilliqa price has bounced back in the past few days and has jumped to its highest point since January 3rd of this year. It has rallied by more than 43% from its lowest point this year as it has risen in the past five straight days. This jump has brought its market cap to over $455 million.
Zilliqa ecosystem struggles
Zilliqa is one of the oldest and most innovative players in the blockchain industry. One of its key innovations was known as sharding, which has now been embraced by other well-known blockchains like Near Protocol and Elrond.
Sharding is a process where a blockchain slices blocks into smaller units known as shards to supercharge its speed and throughput. It has become a popular technology such that it will be implemented in Ethereum’s network.
The challenge with Zilliqa is that its ecosystem growth has trailed that of other blockchains by far. One way to look at this is to consider the Decentralized Finance (DeFi) industry, the biggest sectors in the blockchain industry.
Read more: How to buy Zilliqa.
Data shows that Zilliqa’s ecosystem in DeFi is a relatively small one. There are only five dApps that have a combined Total Value Locked (TVL) of $4.77 million. These dApps are ZilSwap, Avely Finance, PlunderSwap, Ionise, and Pillar. ZilSwap and Avely Finance have over $2.79 million and $1.77 million, respectively.
This performance means that Zilliqa has been overtaken by many blockchains, including some that are barely a year old. For example, Sui has 26 dApps and a combined TVL of over $625 million while Arbitrum has over 553 dApps and over $3.8 billion in assets.
Zilliqa’s on-chain data shows that the network is not growing as fast. Data in its explorer shows that the number of new Zilliqa addresses rise by less than 1,000 per day. On Tuesday, they rose by 745 after rising by 645 on Monday this week. Total addresses stand at 4.7 million today.
Therefore, Zilliqa price has done well recently even as it lagged behind that of other altcoins like Solana and even Bonk. This performance is in line with that of other cryptocurrencies like Ethereum and Bitcoin since there has been no Zilliqa-specific news.
Zilliqa price forecast
Turning to the daily chart, we see that the ZIL price has been in a steady recovery in the past few days, helped by the strong crypto performance. The token formed a golden cross, where the 50-day and 200-day Exponential Moving Averages (EMA) cross each other, on April 11th.
Further, Zilliqa has jumped above the upper side of the Andrews Pitchfork tool, which is a positive sign. It has also moved above the 50% Fibonacci Retracement level while the Relative Strength Index (RSI) was pointing upwards. It also formed an inverse head and shoulders pattern, which is a popular bullish sign.
Therefore, the outlook for Zilliqa is mildly bullish, with the next point to watch being at $0.028, its highest swing in December and the 61.8% retracement point. A move above that level will open the possibility of it jumping to the key resistance at $0.031, the 78.6% retracement level.
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