The Impact of Soaring Ethereum Transaction Fees on Celestia’s TIA Cryptocurrency Discussed by Crypto Venture Capitalist
The escalating Ethereum network fees are reaching unprecedented levels, potentially providing a boon for data availability platforms like Celestia, as per insights shared by Ryan Watkins, a crypto venture capitalist and analyst at Syncracy Capital.
Watkins has suggested that the surging costs of Layer 2 transactions on Ethereum may prompt certain protocols to consider utilizing Celestia.
He expressed his views by stating,
“As Ethereum transaction fees continue to climb, a significant window of opportunity is emerging for Celestia… This opens the door for Celestia to attract high-performance Layer 2 solutions that are currently constrained by Ethereum’s exorbitant fees and limited transaction capacity.”
Can TIA Reap the Benefits?
Considering these developments, Watkins is optimistic about Celestia’s long-term growth prospects, given Ethereum’s future outlook focusing on rollups.
However, the question remains – will TIA’s price be positively influenced by these underlying factors?
The uptrend in TIA’s market interest has reached a monthly peak, evident from the spike in social media activity. Historically, increased social engagement has correlated with a rise in TIA’s valuation. At the time of reporting, TIA had surged by 10% on the daily chart, hitting a price of $8.4.
Furthermore, market sentiment leans in favor of the bulls. Data from Binance’s Top Traders positions shows that over 70% of traders are holding long positions on TIA, indicating a prevailing bullish sentiment expecting further price appreciation for the cryptocurrency.
Yet, a potential hurdle looms, particularly for investors with long-term horizons intending to hold the token for extended periods. Presently, less than half of the total TIA supply is in circulation, with a significant portion of the token supply scheduled for release starting from October onwards, with a full unlock expected by 2025.
Approximately 7 million TIA tokens (equivalent to $57 million) are set to enter the market within the next seven days.
The anticipated rise in supply, coupled with potential inflationary pressures as initial investors offload their holdings, could impact the price dynamics of TIA for those holding their positions over the long haul.
Despite these factors, the immediate price targets stand at $10 and $12. Strong demand and the current bullish momentum may embolden investors to aim for these levels.
Nevertheless, a critical resistance zone lies at $12, a formidable barrier that has restrained TIA’s price movement below the $10 mark since May.