DeFi sector growth pushes Reserve Rights, 0x and Kyber Network higher

Bitcoin (BTC) has bounced back above the $32,000 level today, but Guggenheim chief investment officer Scott Minerd believes that the current institutional demand is not sufficient to keep the price above $30,000 for long. Despite this view, Minerd continues to believe that the current downturn does not alter the long-term bullish story of Bitcoin.

While several institutional investors are turning positive on Bitcoin as a store of value, BlackRock CEO Larry Fink does not seem impressed. Fink pointed out the volatility and called Bitcoin “a very small market” that is affected by small-dollar investments. Although Fink said that “some form of a digitized currency is going to play a bigger role in the future,” he was unsure if it would be Bitcoin.

A cryptocurrency that has a strong use case and can keep up with the ever-growing demands of crypto users may have good future prospects. The tokens selected today are strong contenders that fill each of these criteria.

RSR/USD

The Reserve protocol aims to reach the unbanked, help people transact and preserve wealth against the devaluation of a currency by using a stablecoin. This is a strong use case, especially in countries that suffer from the clutch of hyperinflation.

The team is currently mainly operating in Venezuela and Argentina, where the local fiat currencies have rapidly lost their purchasing power. Initially, the team wants to concentrate on streamlining the process. Various incentive measures for growth are planned for the later part of the year.

In a recent ask-me-anything session, Reserve co-founder Nevin Freeman said the protocol aims to do a mainnet launch in 2021 but refrained from putting a timeline to it. The protocol wants to expand its team to speed up the process, and it's on the lookout for new engineers. The mainnet’s launch may also open arbitrage opportunities for Reserve Rights (RSR) tokenholders.

The team is also in discussion with PayPal about allowing users to cash out using the platform. Reserve expects the results of the deliberation in the first quarter of this year.

RSR corrected from an intraday high at $0.04941 on Jan. 18 to a low at $0.03086 on Jan. 27, a fall of 37% in the past 10 days. The price has currently rebounded off the breakout level of $0.030, which suggests the previous resistance has flipped to support.

If the bulls can push the price above the 20-day exponential moving average ($0.036), a move to $0.042 and then a retest of $0.04977 is possible. A breakout of this resistance will resume the uptrend, with the next target objective at $0.065.

On the other hand, if the price turns down from the 20-day EMA, it will suggest the sentiment has turned bearish and traders are looking to sell on rallies. If the bears can sink the price below the 50-day simple moving average ($0.0297), the pair could drop to $0.025.

Such a move will indicate the bullish momentum has weakened and bears have made a comeback.

ZRX/USD

As the crypto market matures, the popularity of decentralized exchanges is on the rise, and 0x is one of the beneficiaries. The community recently voted to upgrade the protocol to version four, which promises several improvements to its users.

This upgrade is expected to result in gas savings of up to 70% for requests on quote and 10% for limit orders, compared with the previous version. The protocol also highlights that the upgrade has made it cheaper for users to trade on Uniswap and SushiSwap using 0x version four rather than on their native platforms.

Users seem to be impressed with the new features, and the exchange recorded a 24-hour trading volume record of $200 million recently. The latest version is also auto-upgradable, allowing future changes to be incorporated easily.

0x's ZRX token has risen from an intraday low at $0.4337 on Jan. 22 to an intraday high at $0.6688 today, a 54% rally in seven days. The price is currently forming a rounding bottom pattern, which points to a possible trend reversal.

The 20-day EMA is sloping up and the relative strength index (RSI) is in the positive territory, indicating bulls are in control.

The buyers pushed the price above the $0.6310 resistance today, signaling the resumption of the uptrend. There is a minor resistance at $0.6784, but if that level is crossed, the ZRX/USD pair could rally to $0.75 and then to $0.85.

This bullish view will invalidate if the price turns down from the current level or the overhead resistance and dips below the 20-day EMA ($0.52). Such a move will suggest that supply exceeds demand. That may result in a fall to the 50-day SMA at $0.044.

KNC/USD

The decentralized finance space has evolved over the past few months, and a surge in transaction volumes has followed. To keep up with the latest trends, Kyber Network has announced an upgrade to its protocol. The Kyber 3.0 upgrade will transition Kyber from a single protocol to a network of specialized liquidity pools, catering to various DeFi use cases.

A new automated Dynamic Market Maker will allow permissionless liquidity contribution and enable the liquidity pool creators to adjust their pricing curves. The upgrade also attempts to reduce the damage from impermanent loss by automatically adjusting trading fees, which will be increased during periods of high volume and decreased when the volume is low.

The Kyber DAO and the Kyber Network Crystal (KNC) token will be upgraded to a new token contract that aims to add to the token’s governance power and create multiple streams of token utility. The upgrade is expected to be completed by the third quarter.

KNC corrected from $1.492 on Jan. 21 to an intraday low at $1.145 on Jan. 27, a 23% correction in seven days. However, the price has rebounded off the 20-day EMA ($1.22) today, indicating demand at lower levels.

The upsloping moving averages and the RSI in the positive territory suggest bulls have the upper hand. If buyers can push the price above the $1.36 to $1.50 resistance zone, the KNC/USD pair will complete a double bottom pattern, which has a target objective of $2.02.

It may not be a straight dash to $2.02 because the bears are likely to defend the $1.80 resistance. If the price rebounds off $1.50, it will suggest the sentiment remains positive and that bulls are buying the dips.

Contrary to this assumption, if the price turns down from $1.36 or $1.50 and breaks below the 20-day EMA, it will indicate selling at higher levels. Such a move could keep the pair range-bound for a few more days.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk, you should conduct your own research when making a decision.