Chiliz Hard Fork Fails To Impress Traders, CHZ Continues Downtrend
Chiliz, a sports and entertainment-centric blockchain solution, has implemented its hard fork called the Dragon8. The upgrade claims to enhance the network’s scalability, security, and efficiency.
However, the development failed to impress CHZ bulls, and the token has continued its downward spiral since June 10.
The downtrend has forced the CHZ price to drop nearly 32% since June 10 to reach a daily low near $0.09 on June 17. Breaking below the psychologically vital $0.1 price label could erode investor confidence in the token.
Moreover, the strength of the bearish pressure is visible from the fact that CHZ refused to budge from its downtrend despite the Chiliz hard fork news.
The Dragon8 Hard Fork and New CHZ Tokenomics
The Dragon8 hard fork, which went live on June 17, introduced several changes in the Chiliz Chain’s framework. The upgrade faced delays due to implementation issues, necessitating a thorough review.
Additionally, the hard fork introduces Tokenomics 2.0, which the project claims would address the limitations of the original token structure and improve the long-term sustainability of the Chiliz ecosystem.
The original tokenomics, structured for a static, fully vested circulating supply, proved inadequate for the network’s expanding demands. Furthermore, the lack of allocatable inflation and hard-coded burn mechanisms hindered long-term community engagement and governance participation.
The new tokenomics model introduces a dynamically decreasing annual inflation rate, starting at 8.80% and reducing to 1.88% over 14 years.
Moreover, integrating EIP-1559 would help refine economic efficiency by implementing a transaction fee-burning mechanism, balancing rewards for both short-term and long-term participants.
Developers now have access to the latest version of Solidity, enabling advanced applications and fostering innovation within the Chiliz ecosystem. The changes helped the CHZ token establish itself as the protocol’s governance and gas token.
The long-term benefits of the Chiliz Dragon8 hard fork and the new tokenomics model could help CHZ price restart a rally, but it will likely take some time.
CHZ Price Forms Bearish Setup
Meanwhile, CHZ price has formed a bearish technical setup called the ‘descending triangle pattern.’
The pattern could be negating some of the bullish cues coming from the Chiliz hard fork news.
Market analysts often consider the descending triangle a bearish continuation signal.
The configuration features a downward-sloping upper trendline, which gradually reduces the price action’s highs, and a flat lower trendline, which is a consistent support level the price finds difficult to break.
Moreover, the pattern suggests that selling pressure is intensifying, leading to successively weaker rallies. In this setup, the potential price target is typically gauged by the maximum height of the triangle at its widest point.
Hence, confirming the bearish pattern might result in the CHZ price dropping over 44% to reach the projected price target of nearly $0.05.
Chiliz bulls would desperately hope for the CHZ price action to factor in the project’s latest hard fork.
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