The Growing Popularity of The Graph
The Graph is an open-source protocol used to collect, process, and store data from various blockchain applications, enabling more efficient data retrieval. Initially launched on the Ethereum blockchain, it aims to help developers access and utilize blockchain data to improve decentralized applications (dApps).
In simple terms, The Graph indexes blockchain data into Subgraphs, which allows any dApp to query the protocol and receive an instant response. These queries are made through GraphQL, a widely adopted language originally developed by Facebook for its news feed data.
Importantly, users of The Graph, such as indexers and delegators, play a vital role in processing and delivering data to applications. For the latest updates on The Graph, users can follow the official blog for new developments.
As the popularity of The Graph grows, it is already being utilized by major Ethereum dApps like Aave, Curve, and Uniswap. Since 2019, The Graph has raised $19.5 million through token sales, including $10 million from a public sale in October 2020. Around 21% of the initial 10 billion GRT tokens were sold to investors, including Coinbase Ventures, Digital Currency Group, and Multicoin Capital.
The native cryptocurrency of The Graph, GRT, helps secure the network’s data. Users such as indexers, curators, and delegators must stake GRT tokens to perform their roles and earn rewards. GRT holders can also participate in the governance of the platform by voting on proposals related to its development and usage.
GRT: A Potential Investment Opportunity
Investors may consider adding GRT to their portfolios if they believe that decentralized applications will continue to need large amounts of blockchain data to function effectively. While The Graph initially issued 10 billion GRT tokens in 2020, the total supply is expected to grow by 3% annually, with about 1% of tokens being removed from circulation each year.
GRT could be particularly appealing to developers looking to build blockchain-based applications that require quick and efficient access to blockchain data. If The Graph proves to be an essential tool for decentralized applications, it could become a key player in connecting all blockchain-based applications.
Since May 22, 2024, GRT has been in a downtrend, reflecting a significant drop in large trades. A reduction in large trades can lower liquidity, making it harder to buy or sell large quantities of GRT without affecting the price. With less liquidity, the market may be more vulnerable to price swings. Potential investors should be aware that smaller trades could have a more significant impact on GRT’s price.
Technical Analysis for GRT
GRT has dropped from $0.35 to $0.15 since May 22, 2024, with the current price at $0.18. The price decline is attributed to changes in trader sentiment from positive to negative. As long as GRT stays below the resistance level, there is a continued risk of further price declines.
Key Support and Resistance Levels for GRT
The chart from November 2023 highlights important support and resistance levels. GRT has weakened recently, but if the price rises above $0.25, the next target could be the $0.30 resistance level. The strong support level is at $0.15, and if the price breaks this level, it would trigger a “SELL” signal, potentially leading to a decline to $0.10.
What Could Drive GRT’s Price Higher
General market sentiment plays a crucial role in GRT’s price movements. Positive news, partnerships, and advancements related to The Graph can attract more investors and traders, pushing the price up. The actions of crypto whales are also closely monitored, as large transactions can influence market sentiment. If the number of large transactions for GRT increases, it could be seen as a bullish signal, attracting more buyers. For GRT to see a price increase, a move above $0.25 would be a key level to watch.
What Could Lead to GRT’s Decline
The Graph is a volatile investment, and fluctuations in its price are common. The value of GRT is closely tied to the adoption of The Graph’s technology by developers and decentralized applications. As The Graph operates in a competitive space, new innovations or competitive advancements from other projects can impact GRT’s market position. Investors should remain cautious and continue to monitor the platform’s adoption rate and competition.
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The popularity of The Graph is growing, with Ethereum dApps like Aave, Curve, and Uniswap already using it. However, analysts are concerned that if Bitcoin drops below $60,000 again, it could trigger a broader sell-off, making it harder for GRT to hold its current price levels. Additionally, the number of large transactions for GRT has significantly dropped over the last two months. This lack of interest from major investors suggests that we may continue to see low prices for GRT in the short term.
Disclaimer: Cryptocurrencies are highly volatile and may not be suitable for all investors. Never invest money you cannot afford to lose. The information provided is for educational purposes only and should not be considered as financial or investment advice.
