It’s almost as if its Christmas in July for Tezos investors, who have watched their favorite altcoin crypto asset rise over 25% in less than 14 days. But what’s driving the seemingly unstoppable rally, and will it sustain?
Altcoin Season Leads Crypto Investors To XTZ
All across the crypto market, altcoins are soaring, while Bitcoin stagnates. That can only mean one thing: alt season. And while Bitcoin trades sideways and brings boredom to those that trade the asset, several altcoins have been exploding in value.
Among those assets, are last year’s top performers, Tezos and Chainlink. And while XRP and other majors, as well as small-cap altcoins, have been also showing strong performance, its been nothing quite like the aforementioned duo.
The two altcoins often surge together, or one thereafter another. This past week, Chainlink went fully parabolic, breaking upward out of an uptrend channel and setting a new all-time high.
Related Reading | Small Cap Altcoins Have Outperformed Bitcoin By 5x in 2020
The altcoin is now in full price discovery mode, setting new record highs with each new passing day. Because the cryptocurrency tends to lead movements in Tezos, crypto investors have been watching and waiting for a move to begin.
Thus far month to date, Tezos is already up over 25% and still climbing. Last week’s candle closed last night at over 20% returns for the week, and the new weekly candle is already up 8% in a single day on the USD pair.
But what exactly is causing Tezos sudden surge?
XTZUSD Daily | Source: TradingView
Can Tezos Follow Chainlink Into Price Discovery Mode?
Few altcoins have been as hyped as Tezos over the last several years. The protocol can be used to launch security token offerings, but at the start of 2020, staking helped propel Tezos into the limelight.
Staking lets crypto investors park their XTZ tokens in a wallet, and earn a yield on it. Staking rewards can reach as high as 4.9% APY, making the asset highly appealing.
Not only are investors earning an ROI when the altcoin surges, but they are also earning rewards just from holding the crypto asset in a wallet.
Tokens that provide additional yields in some way have been all the rage in 2020, but even that isn’t why Tezos is surging.
Tezos is likely riding the Chainlink momentum. The two altcoins debuted after Bitcoin peaked and the crypto bubble burst. These assets have experienced only upside in their lifecycles and weren’t tarnished by the bear market drawdown.
— CRYPTO₿IRB (@crypto_birb) July 13, 2020
Add in the perfect conditions for an altcoin season with Bitcoin trading sideways, and Tezos has exploded in value. As much as XTZ has grown against USD, it has also shown strong performance against BTC on the ratio.
Sell signals across multiple altcoins were hinting of an end to alt season, but among those assets included Chainlink. With that asset continuously setting record high after high, will Tezos be next to enter price discovery mode?