Elrond’s DAFI integration could catalyze the network adoption, but EGLD price heads south

Elrond and DAFI Protocol partnership will reward users who engage with the EGLD blockchain. Despite the significance of the news, EGLD price shows a clear presence of sellers who could drag it into a steep correction.

DAFI to reward EGLD’s ecosystem of projects

Elrond is known for its highly secure and programmable blockchain that is hitting important milestones due to the “hypergrowth” campaign. The Elrond ecosystem has seen considerable growth recently as it stepped into DeFi, launched a payments application, and announced a flurry of partnerships. 

As a part of this campaign and to help foster the network’s expansion, Elrond and DAFI Protocol have partnered up to bring rewards to the EGLD ecosystem.

DAFI Protocol uses synthetics pegged to various decentralized blockchains. In doing so, users can create dTokens to reward early adopters and trigger further network adoption while keeping strong security and maintaining scarcity.

The recent announcement read,

DAFI rewards networks… with synthetics that are distributed to users in a reduced quantity initially, to protect a token from hyperinflation. Through our collaboration, DeFi projects building on the Elrond Network can opt to use the Dafi Protocol and complement their economics with an algorithmic model where real adoption is factored in.

Elrond is already a highly active blockchain since it has an ecosystem of projects building on top of the protocol because it is secure, fast, and scalable. The popular payments app Maiar may encourage users to take advantage of the recent partnership to gain rewards. As the network’s utility expands, the better the outlook for both Elrond and EGLD price.

Elrond price prints a bearish outlook

Elrond price showed sellers around the $166 supply barrier, which resulted in price corrections. However, buyers scooped up these pullbacks more aggressively, creating higher lows. 

Drawing trendlines along the horizontal resistance and the higher lows results in an ascending triangle pattern. This technical formation forecasts a 40% downswing as EGLD broke out of the hypotenuse at $135. A further spike in selling pressure could see Elrond price dive to $80.

Supporting this bearish outlook is the SuperTrend indicator’s sell signal that was given recently. Investors should note that if Elrond price slices through the Momentum Reversal Indicator’s (MRI) breakout line present around the $120 level, then all hell might break loose. 

EGLD/USDT 6-hour chart

However, in case of a successful recovery by the bulls, the $120 support level could facilitate a reversal in the price trend. If this were to happen, a breakout above the horizontal support at $166 will invalidate the bearish outlook and send Elrond price towards the next critical resistance point at $235.