EOS sees strong TVL growth after deploying this strategy
- EOS benefits from the focus on dApps that incentivize staking.
- The EOS price pattern is showing signs of a possible bearish week.
The amount of liquidity or total value locked (TVL) is one of the criteria used to assess the health of blockchain networks. By this measure, the state of the EOS network looks more promising this year.
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According to one of the latest updates from the EOS network, it has seen growth and expansion in its DeFi ecosystem. But what’s interesting is that EOS achieves this growth through a strategy called the Yield+ initiative.
A deeper dive reveals that it’s all about incentivizing top dApps that increase network TVL.
The #Challenge ecosystem on #EOS is growing fast 🚀
This is largely thanks to the efforts of the Yield+ initiative, which aims to incentivize $EOS #dApps which increase the TVL and generate yield 🤑
Learn more in the latest report👇https://t.co/PjL1oU20bO pic.twitter.com/PahKWJme4G
— EOS Network Foundation (@EOSnFoundation) January 27, 2023
The update suggests the network is achieving healthy organic growth. An assessment of EOS TVL on DeFiLlama confirms that it has indeed been on a positive trajectory since its low range in November.
Despite this, TVL still has a long way to go before it regains the highs of last year.
Source: DeFillama
Nevertheless, the resurgence of TVL is good news for EOS Investors since it confirms a positive turn for the network. It reveals that liquidity has flowed into the ecosystem and possibly reflects the shift to bullish market sentiment.
A comparison between the TVL and the market cap reveals that the TVL pivoted weeks before the start of the bullish rally. This raises the question of whether the change in TVL was a healthy early warning sign.
What we can learn from the EOS price chart
Many factors affect demand levels or selling pressure in the market. However, investor psychology often lends a degree of legitimacy to chart patterns.
If this is the case with EOS, we can expect increased selling pressure and lower prices in the coming weeks.
This is due to the price-RSI divergence pattern that has formed over the past couple of weeks.
Source: Trading View
The divergent price-RSI pattern is often associated with a sign that the trend is losing momentum, and a pivot will follow.
While this is currently the most likely option based on the aforementioned model, it doesn’t have to be. The bulls could still regain control, especially in case strong demand emerges in the coming days.
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