Pullback Expected After Going Parabolic
The Lisk price defied gravity on Friday morning. LSK jumped to a high of $3.27, the highest level since December last year. The coin is now trading at $2.80, about 104% above its lowest level this year. Its total market cap has risen to about $418 million, making it the 180th biggest coin globally. Other coins like Bitcoin, Ripple, and Ox have declined sharply.
What is Lisk and why is it rising?
Lisk is a relatively small layer-1 blockchain project that seeks to become a viable alternative to Ethereum. Its goal is to help developers build quality applications that are highly interoperable. In the past few months, the developers have been building the product and offering grants to people building in the ecosystem. Some of the applications built using Lisk are Enevti. Colecti, Kalipo, Identity, and doEdu.
It is unclear why the Lisk price went parabolic as other cryptocurrencies declined. This performance is likely because the network decided to embrace Javascript for building applications. Since this is one of the most popular programming languages, analysts expect it will incentivise more builders to embrace the network.
However, like other networks, Lisk faces numerous challenges going ahead. First, its ecosystem is relatively small to date. As such, it will find it difficult to compete with well-known platforms like Solana and Avalanche.
Second, as a small network, it might not have the resources to incentivise developers. For example, Kadena announced a $100 million incentive program on Thursday. Avalanche has programs worth over $500 million.
Third, the industry is getting more crowded. Some of the largest players in the sector include Ethereum, BitTorrent, Tron, Cronos, and BNB, among others.
Lisk price prediction
The daily chart shows that the LSK price pumped on Friday morning. As a result, it rose to the highest level since December. Also, it moved above the important resistance level at $2.771, which was the highest level this year. It is also above the 25-day and 50-day moving averages, while the RSI has moved close to its overbought level.
The Lisk price will likely experience a significant dip as investors start to take profits. If this happens, the next key level to watch will be at $2.50. A move above the intraday high of $3.26 will signal that there are still more buyers in the market.
