Staking Rewards
Staking
is the process of holding a certain amount of a given cryptocurrency in
a wallet for an extended period to support the functionality of its
network. It translates into locking cryptocurrencies to receive rewards.
Generally, protocols that support the Proof of Stake (PoS) consensus
mechanism use staking as a method to maintain the underlying blockchain
secure and efficient.
In a move to provide value to its
customers, Coinbase revealed would stake Tezos. The process would be
done on behalf of customers, and the rewards will be distributed
directly to their accounts. Even though anyone can stake XTZ on their
own, this new service offers a simple, easy, and secure way to do it.
The announcement reads:
“[Customers
only need to] buy Tezos on Coinbase or deposit Tezos to [their]
Coinbase account from an external wallet, and [they’ll] start earning
rewards immediately.”
Users must go through an
initial holding period of 35-40 days before they can receive the first
rewards in their accounts. After that, users will receive their rewards
every three days. Coinbase estimates an annual return rate of
approximately 5 percent.
Moreover, the San Francisco-based
cryptocurrency exchange also launched the Coinbase Earn Tezos campaign.
This is an educational initiative that lets customers learn about the
Tezos protocol while earning up to $6 worth of XTZ.
The Market Reacts
Following
Coinbase’s announcement, XTZ’s market value surge over 50 percent.
Throughout most cryptocurrency exchanges, Tezos hit a high of $1.43 just
a few hours ago. But, the bullish impulse was even more noticeable on
Coinbase.
On this platform, Tezos hit a high $1.90 a couple of
minutes after the news dropped. It seems like the announcement triggered
investors into panic buying this cryptocurrency. However, XTZ reached
an exhaustion point and plummeted over 20 percent. Now, this crypto is
hovering around $1.15 and could be on the verge of another significant
price swing.
Bearish Outlook on Tezos
CCN reach out to
Lunar Express, a technical analyst, to gather his thoughts about Tezos. According to the cryptocurrency trader:
The spike stopped at the 61.8% Fib line which converged with a key resistance zone. Since then, Tezos backed down and I don’t think that this decline is done. XTZ can easily move towards the 100-day MA before it can move higher again. Losing the 100-day MA would be a bearish warning.
Additionally,
Maxime Prigent
told CCN that Tezos is a “coin flip” now. The French technical analyst
said that if XTZ is not able to sustain the current price and closes
underneath the 200-day MA, it will probably go back to the $1 support or
below. Thus, the $1.17 price barrier is the key resistance point that
must be overtaken for the continuation of the bullish trend.
Moving forward
The
sentiment around Tezos appears to be bullish.
As Coinbase offers staking services for this crypto, more investors
could try to hold it for a more extended period. This could take a
significant number of sellers off the market, allowing XTZ to resume its
bullish trend.
OKEx, the world’s third-largest cryptocurrency
exchange by trading volume, announced that it would be listing Tezos on
its retail platform. The move will provide access to XTZ to millions of
retail investors, which adds credibility to the bullish outlook.
Disclaimer:
The technical analysis above should not be considered trading advice
from CCN. The writer owns bitcoin, Ethereum, and other cryptocurrencies.
He holds investment positions in different cryptos but does not engage
in short-term or day-trading.
This article was edited by Samburaj Das.
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