Multichain Backend Upgrade Delay
π Welcome to the Multichain Token Analysis Dashboard! π π Explore how the backend upgrade delay impacted the Multichain platform and its token. π π Here are some key insights: π - The delay triggered a 30% price crash and a slump in trading and liquidity for the MULTI token. π₯ - The price trend of the MULTI token followed the price trend of ETH, which is a dominant factor in the crypto market. π - The first support level on the price chart held strong even during the worst scenario, showing loyal holders who did not panic sell. πͺ
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Introduction
Multichain is a cross-chain router protocol that allows users to swap between any two chains freely and perform 0 slippage transfers. It also has its own native token called MULTI that is used for governance and fees. On May 24th, 2023, Multichain announced that its backend upgrade, which was supposed to improve the speed and security of its cross-chain transactions, was delayed due to technical issues. This news caused a significant price plunge of 30% for the MULTI token, as well as a drop in trading volume and liquidity. The delay also raised questions about the reliability and competitiveness of the Multichain platform and its token.
In this analysis, we aim to provide a comprehensive overview of the Multichain Token's ecosystem and its performance during and after the backend upgrade delay.
To achieve our aim, atechnical analysis of the $MULTI token shall be done to understand what is going on with the platform and what future lies ahead of multichain. Afterall, it is believed that the secretes of a product's health lies in the price flunctutions and worth of the products as viewed by the consumer, in our case, the user.
By conducting this analysis, we hope to provide valuable insights for investors, traders, developers, and users who are interested in the Multichain project and its token. We will also provide actionable recommendations based on our findings and conclusions.
πLooking at the chart to the left, we compared the price of the $MULTI token to the $ETH token, and it can be seen that $ETH had a significant impact on the price behavior of $MULTI. This is actually a common and normal phenomenon in the cryptoverse. Bitcoin and $ETH are seen as the major drivers of many crypto tokens, and the impact of their price drop is felt across multiple chains.
What is fascinating is the drop in the price of $MULTI on the day of the backend upgrade, while $ETH seems to have gained a little since then. This indicates that the price movement of $ETH, a major factor determining the price of the $MULTI token, is not responsible for the drop in price, but rather the delay in the backend upgrade.
Let's dig deeper.
A rising moving average signals a bullish trend, while a falling moving average points to a bearish trend. In this case, we can see a bearish trend.
If the 20-day moving average is below the 50-day moving average (as shown on the graph), it generally means that the short-term trend is more bearish than the long-term trend. This means that the price has been falling faster over the past 20 days than it has over the past 50 days, indicating downward momentum in the market.
When the 200-day moving average falls below the 50-day moving average, itβs generally a sign of a short-term bullish trend for the assetβs price. This is because the 200-day average reflects a longer-term trend, while the 50-day average shows a shorter-term trend.
If the 50-day average is nearing the 200-day average but hasnβt crossed it yet, this could signal a potential change in trend. This is sometimes called a βgolden crossβ and is seen as a bullish signal by some traders. However, in this case, itβs actually a bearish signal. It suggests that the shorter-term trend is losing momentum and may soon cross above the longer-term trend, which could lead to lower prices.
To determine the buying and selling pressures, we calculated the total amount of the $MULTI token entering CEXes (selling) and leaving CEXes (buying) within the specified timeframe.
πFrom the chart to the left, we can observe a significant buying pressure on the $MULTI token, with approximately $8.45 million USD worth of $MULTI sold on the day of the upgrade. This buying activity has continued, albeit in smaller quantities, since then.
Furthermore, it is evident that buying activities have gained momentum since the upgrade, as more buying volume can be observed in the days following the upgrade. This increase in buying volume may be attributed to both users who lost faith in the token and some traders rushing to capitalize on the substantial drop in the token's price.
To confirm our speculation, over $11 million USD worth of the $MULTI token was sold on the same day as the backend upgrade.
Since Multichain provides liquidity across different chains, let's now examine the daily deposits and withdrawals on the Multichain protocol.
And as expected, following the previous trend, there was a substantial deposit and withdrawal of the $MULTI token on the day of the backend upgrade delay, which deviated from the normal phenomenon observed in the preceding days.
The netflow for that particular day indicated a volume of $18 million USD, suggesting that there were more withdrawals than deposits.
HINT: You can click off the null display on the chart to have clearer picture of what is being explained in this section
Support refers to the lowest point the price chart reaches while resistance is the maximum point on the price chart.
A one year price of the $MULTI token will be used for our analysis.
It is important to note that the first support is still the lowest support on the price chart, other supports were added to further explain the price trend.
Since June last year, $MULTI token pricce is seen to to have had its peaks and pitfalls. Lets take a closer look.
The first support was on the 18th June, 2022 afterwhich a bullish trend was seen until 13th August, 2022 where a new reistance level was attained. A bearish trend is then noticed until 13th Oct, 2022 where a support, although not as small as the initial was seen before another short bullish run that ended early November and the price plumetted until 14th November Please notice the trend. Then a bullish run was seen from that date, the pace was rapid at early January and this ofcourse can be attributed to the price of $ETH going up and a new final resistance was attained on the 15th of April.
Notice how long it took to break the resistance and notice how that the first support was not broken through out the one year journey of the token's lifespan. Then notice what always happens when the price of the token plummets, it always indicates a bullish run.
And since the first support was not broken even by the backend upgrade delay, this indicates that a lot of the users still have faith in the protocol and are ready to back it up.
So YES, the future of the $MULTI Token is very bright.
Conclusion
In this analysis, we have examined the Multichain Token's ecosystem and its performance during and after the backend upgrade delay that occurred on May 24th, 2023. We have found that the backend upgrade delay had a significant negative impact on the price, volume, and liquidity of the MULTI token, as well as on the market perception and competitiveness of the Multichain platform and its token. We have also found that the price movement of the MULTI token was largely influenced by the price movement of ETH, which is a common phenomenon in the crypto market. However, we have also found some positive signs for the future of the Multichain project and its token, such as:
- The increase in buying pressure and activity after the price drop, indicating that some investors saw an opportunity to buy low and support the project while making some sidebucks.
- The high level of withdrawals compared to deposits on the day of the delay, which might(speculative though not objective) indicate that most users did not sell their tokens but rather moved them to other platforms or wallets.
- The resilience of the first support level on the price chart, indicating that the token has a strong base of loyal holders who did not panic sell even during the worst scenario.
- The historical trend of bullish runs following bearish periods, indicating that the token has a potential to recover and reach new highs in the future.
Based on our findings and conclusions, we provide the following recommendations for investors, traders, developers, and users who are interested in the Multichain project and its token:
- Investors should monitor the progress of the backend upgrade and its impact on the speed and security of cross-chain transactions. They should also look for signs of increased adoption and innovation from the Multichain platform and its partners.
- Traders should use technical analysis tools such as support and resistance levels, trend lines, moving averages, and indicators to identify entry and exit points for trading MULTI tokens. They should also be aware of the volatility and risk associated with crypto markets and use proper risk management strategies.
- Developers should explore the opportunities and challenges of building on top of Multichain platform and its cross-chain router protocol. They should also leverage the governance and fee mechanisms of the MULTI token to create value for themselves and their users.
- Users should take advantage of the low slippage and high liquidity offered by Multichain platform and its cross-chain router protocol. They should also participate in the governance and feedback processes of the project to voice their opinions and suggestions.
We hope that this analysis has provided valuable insights for anyone who is interested in the Multichain project and its token. We also hope that this analysis has demonstrated our skills and expertise in data analysis. We are looking forward to hearing from you soon.
A total of 201 users had their balance change out if the 1.3k holders of the Multi token. This was 16.9% of the total holders of the $MULTI token.
The low percentage above is a positive sign that majority of users are still holding on to the $MULTI token.
Although planktons had the most users change in balance (41users), whales follows closely with 39users with balance changes.
It is important to note that the balance changes above are not known, that is, positive or negative.