Tezos (XTZ) Loses More Than 50% In Less Than 2 Weeks
Cryptocurrency markets have struggled this week as prices continued to slide amid a confluence of mixed sentiments.
Most of the top currencies saw their prices dip, eroding gains made over the previous week.
Among the top losers is Tezos (XTZ), which peaked at approximately $2.32 per coin yesterday, is now trading at $2.00 flat with more downside coming.
Overall, the token ranks top with a decline of about 78 percent since its all-time high reached in December 2017 or over the last six months of 2018. Ouch.
XTZ current market performance
Tezos stormed the top 20 cryptocurrency rankings on the back of a great performance in the market. Currently, the token is showing signs of further declines away from yesterday’s price and increasing the damaging effect of the drop.
Its ranked 18th on CoinMarketCap and has a market cap of about $1.21 billion at the time of writing. The token is exchanging hands at around $2.00 and is trending in the red as sentiment continues to head south.
Tiny uptrend this morning
In the last 24 hours, the XTZ/USD pair has dropped by about 6 percent. It’s trending towards new lows as it hits an hourly drop of about 5 percent.
This represents a downward correction that erodes early morning gains. Its 7-day percentage in the green is down to about 6 percent. It was 9 percent during late European trading hours on July 11.
The coin continues to trend south and may test $1.65 in the next few hours. It’s already down by about $0.58 compared to its prices at $2.32 a day before. Another sell-off will see prices return to July 6 levels.
Tezos’ Record ICO sale
Tezos (XTZ) held its ICO in July 2017, raising a record $232 million. It was an exciting time, as investors were buoyed by the fact that the project promised to revolutionize cryptocurrency with its “self-amending” technology.
However, things haven’t been as smooth as it was envisioned. The crypto ran into a series of challenges that delayed the launch of its beta net for a year.
It finally went live on July 1, but its price has taken a beating since. The timing was not ideal with the markets facing a selloff.
At one point, XTZ traded at about $10.51 against the US Dollar. However, it has seen a series of drops to see its price hit a low of $1.21 on July 6.
July price recovery
Tezos experienced a price recovery between July 7 and 10. The coin’s value took an upside trend and by July 8, it had rebounded to reach a high of $2.45 against the US dollar. At the time, it represented a price jump of about 100 percent over its value on July 6.
For a couple of days, the token experienced a steady market performance as prices remained above the $2.30 range.
Investors who had been disillusioned by the year-long delay and negativity but didn’t sell their assets began to feel optimistic.
Much of it is owed to the fact that the token still trades significantly higher than its ICO price of $0.47. As such, even at July 10 prices of $2.31, it was still profitable by a reasonable ROI of 430 percent.
The above one month chart shows the sharp decline in prices between the launch of the beta net on July 1 and its low prices on July 6.
Selloff at launch
Tezos experienced a huge sell-off at the launch of its beta net as investors were said to seek the earliest opportunity to dispose of the tokens. On July 2, XTZ dropped by 52 percent, from a high of about $4.04 to trade at around $1.94 on the next day.
The decline continued relentlessly as what some called “weak hands” exited by selling off their tokens.
Access to the tokens seems to have been the trigger for the sell-off, even though it could only be traded on the relatively smaller Gate.io trading exchange. At the moment, XTZ has been added to HitBTC and could see more listings in the coming months.
There was a sense of recovery, however, as prices rallied to close at $1.80. The decline opened up debate on what the future held for a project once hailed for its ability to transform the cryptocurrency space.
It remains to be seen if the sell-off was just a knee-jerk reaction by sellers or it was a signal that things were taking a turn for the worst.
The Tezos project hasn’t gotten off to a good start in the market after successfully launching its network at the beginning of the month.
Whatever the reason, this isn’t what many of the enthusiasts thought days to the launch. It’s so because the token’s performance tells a different story- one of the sharp price declines and uncertainty.
Nevertheless, it appears challenges and trouble isn’t new to the Tezos project.
There have been loads of challenges and mishaps that have slowed the project since its record ICO last year.
From the outset, there have been allegations of mismanagement, disputes spewing into the public limelight. And then many of the initial team members had to resign as a new team fought to seize control.
Founders Kathleen and Arthur Breitman and the Tezos Foundation president Johann Gevers had a long dispute that ended with the latter stepping down in February. But not before going full circle with an openly embarrassing court case.
Other challenges have included facing a class action lawsuit. At the height of mistrust for the token’s governance system and direction, several investors filed a court case against the Tezos Foundation.
They accused the team of selling unregistered securities, committing securities fraud, and false advertising. That contributed to a possible regulatory indictment by the SEC concerning the possibility of its token being declared a security.
In the days leading up to the betanet launch, the Tezos community faced a very contentious issue.
It was related to the opinion-dividing concept of Know-Your-Customer (KYC) procedure. It was meant to ensure that all US-based token holders who bought the tokens during the ICO were compliant. Some saw it as flying in the face of privacy and anonymity associated with cryptocurrencies.
Tying in with this issue is the underlying feeling that the community is somehow disgruntled, probably distrusting the current board.
Tezos has some similarities with EOS, another of the highly hyped and record ICO projects. The two coins share concerns about their governance system due to the vulnerabilities of a delegated proof of stake algorithm.
There are also concerns that its network security isn’t also stable and it could face challenges similar to those that have afflicted EOS in the past.
Despite that, the expectation is that Tezos (XTZ) will eventually gain in value when markets turn bullish.