If you are looking for a project that is set up for some incredible growth this year, then I have the perfect one for you to look into.
As you may know, Ethereum transaction fees have started to go through the roof. We thought they were pretty expensive last year, but they have been taken to the extreme this year. Transaction fees today average around $13;
Source: Block Chair
And that’s just for sending a transaction across the Etheruem blockchain. If you are interacting with a smart contract or doing a decentralzied exchange on Uniswap, you will be lucky to be paying under $30 for each transaction.
Although ETH 2.0 is in motion and on the way, it is still many months before we might start to see the benefits of the transition from PoW to PoS.
As a result, it seems that we might need to continue hoping a Layer-2 solution can provide some respite from these enormous transaction fees. Layer-2 solutions are designed to take most of the strain off of the main blockchain and conduct the transactions on a “Layer-2 Side Chain” away from Ethereum.
Well, although there are some projects already warming up to Layer-2 solutions, there is one that is quite far ahead of the bunch.
That project is Loopring.
It seems that people are beginning to clock onto the fact that Loopring might help to save hundreds, if not thousands, of dollars on transaction fees. We can see this through the Total Value Locked soaring through these first two months of 2020;
At the start of the year, the TVL in Loopring was sitting underneath $50 million. Today, around six weeks into the year, that TVL has soared above the $200 million level.
Loopring started to change the game for Layer-2 solutions when they launched Loopring 3.0 last February with their zk-Rollup technology integrated into their DEX. This technology allowed most of the trading computation to be rolled up into batch transactions on the Layer-2 chain, significantly reducing traders’ gas fees.
Throughout the year, the team at Loopring continued to innovate, and they continued to change the game after they launched their own Automated Market Maker (AMM) in December 2020.
Again, Loopring changed the game by creating an AMM, similar to Uniswap, using the Layer-2 scaling solution. This allows users to easily conduct ERC-20 based token swaps through a simple, clean interface;
Source: Loopring Swap
Initially, there was little usage on this AMM due to the fact that there were not many pairs to trade against. Well, Loopring has been listening to the requests of the community, and they recently added a plethora of different tokens that you can add to liquidity to and trade against;
With the increased transaction fees, it seems that people are starting to flock to the Layer-2 solutions, and Loopring is by far the leading project that provides “off-chain” trading solutions;
In fact, the Loopring DEX experienced the most volume they have ever experienced in the protocol’s entire history;
Source: Dune Analytics
Prior to January, Loopring had only experienced a peak volume of around $20 million worth of transactions. In January 2021, the total volume surged to over $120 million.
Judging by these metrics, it is quite evident that Loopring is preparing itself for a golden year ahead in 2021.
Is $LRC setting the groundwork for incredible growth?
First of all, let me show you a quick overview from the CoinMarketCap charts;
It shows that Loopring really started to take off in January 2021 when it surpassed the $0.25 highs of September 2020. It has continued even further in February to reach its current price near $0.7.
Now, onto the TradingView charts;
The chart above shows that Loopring surged from the 200-day EMA at the start of 2021. It quickly shot up to reach as high as $0.627 during the month. More specifically, Loopring struggled to close a daily candle above the $0.488 resistance, provided by a 1.618 Fibonacci Extension level.
The breakout of this resistance came toward the end of the month, and then Loopring continued to climb further higher above $0.5. It found some resistance at $0.566 (bearish .5 Fib) but quickly pushed ahead of here, spiking as high as $0.8.
The price for Loopring has dropped slightly over the past week, and it is now battling to break resistance near $0.7, provided by a bearish .618 Fib Retracement level. At the same time, it is managing to find support above a rising trend line.
For this bullish run to continue higher, Loopring will need to break the $0.8 level. On the other side, a drop beneath $0.5 might put Loopring in the bearish territory for the next few weeks.
Let us look at some targets over the coming weeks.
If Loopring breaks resistance at $0.7, additional resistance lies at ;
- $0.763 - 1.618 Fib Extension (yellow).
- $0.8.
- $0.879 - bearish .786 Fib Retracement.
- $0.95 - short term 1.272 Fib Extension.
- $1.00 - bearish .886 Fib Retracement.
- $1.11 - short term 1.618 Fib Extension.
- $1.20
- $1.25 - 1.618 Fib Extension (blue).
On the other side, the sellers push beneath the rising trend line - support lies at;
- $0.6 - round-number support.
- $0.566 - previous early Feb 2021 resistance.
- $0.517 - .618 Fib Retracement.
- $0.5 -
- $0.435 - .786 Fib Retracement.
- $0.387 - .886 Fib Retracement.
- $0.3
- $0.25 - 200-days EMA.
Other Buying-Opportunity Signals
You all must know I am a big fan of Santiment metrics, and there are some very promising metrics to look out for on Loopring;
Firstly, it seems that the release of the Loopring AMM has started to create a buzz in the community for the project. The Social Volume metric for Santiment is soaring;
Source: Santiment
It began to rise at the start of January 2021 and is starting to increase again during February 2021.
Secondly, it seems that the Daily Active Addresses is also on the increase;
Source: Santiment
Again, there was a huge spike during the start of January 2021, but the network’s daily active addresses now remain quite high relative to 2020, indicating increased blockchain activity.
Conclusion
In conclusion, Layer-2 DEX solutions are setting themselves up to take over the show this year. With the increased Ethereum GAS costs, more users will inevitably start flocking over to these Layer-2 protocols, and Loopring is the king of them all.
