YEREVAN (CoinChapter.com) – Coti, a payment transaction network on the Cardano blockchain, saw its same-named token’s value slide 24% since establishing a four-month high on Jan 26. As a result, the COTI/USD exchange rate settled near $0.10 on Jn 30, ahead of the overcollateralized stablecoin Djed release.

COTI loses 24% – will the token hold support?

As mentioned, COTI printed four red candles on the charts after following Bitcoin’s month-to-date rally. However, the COTI coin broke out of a ‘descending channel’ formation and retested its resistance as support on Jan 30, increasing the bullish chances.

Coti Network (COTI) daily price action chart. Source: TradingView.com

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In detail, the channel consisted of two dropping trendlines and a significant mid-range. The formation blocked sharp moves in any direction through consecutive retests. Moreover, the channel does not predict a certain bias after the token in question breaks below the support or above the resistance. However, it can be instrumental in determining short-term targets.

Short-term targets for COTI

COTI broke the channel’s upper trendlines on Jan 25 but returned to the said line, retesting it as support on Jan 30. If the COTI bulls double down, another ascend to the $0.12 peak might be in the books. However, if the selloff fears intensify, the digital asset would be looking at another 9% decline towards the next support at $0.094.

Additionally, the declining daily trading volumes testify to the growing disinterest among traders. The low buying pressure could lead to more value losses in the upcoming sessions, despite the upcoming Djed stablecoin launch.

Djed stablecoin launch is late

In Nov 2022, the Coti Network announced the DJED token would launch in Jan 2023. However, as per the latest news, the token is still in the process of development, and the launch will commence “soon.”

The team’s blog post noted above shed more light on the Djed economics and delegation rewards. According to the post, one of the key components of Djed’s structure is its reserve ratio.

The reserve ratio determines the proportion of $ADA that is held in reserve to collateralize and maintain the stability of DJED. Following extensive research, we have reaffirmed the conclusion that the optimal range for the reserve ratio is between 400%-800%, as initially mentioned in the Djed whitepaper.

explained the team.

Also read: MATIC Whales Buy And Sell As The Polygon Token Paints Bullish Setup.

Due to the recent price decline, this ratio was determined by the maximum monthly decrease of the ADA price at all times. The decline stood at over 66% at the time of the research. In conclusion, the Djed team determined that the over-collateralization of $DJED by around 300% will help to have enough reserve in case it happens again.

The post COTI loses 24% as the Network prepares for DJED stablecoin release appeared first on CoinChapter.

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Filed under: Bitcoin - @ January 30, 2023 1:12 pm