February 3, 2023

  • XTZ was listed on Coinbase Japan on November 6.
  • Unlike the Coinbase effect, XTZ’s price failed to rise.

Prior to its 12th network upgrade, XTZ, the native coin powering the Tezos ecosystem, received a listing from Coinbase Japan (a subsidiary of Coinbase that operates in Japan) on November 6.

In a press release, the open-source blockchain stated that listing XTZ on a leading exchange in Japan would further increase Tezos’ presence in the Asian market.

Read Tezos [XTZ] Price forecast 2023-2024

XTZ’s Coinbase Japan listing is significant because it came before Tezos’ 12th network upgrade — the Lima upgrade.

According to the Lima upgrade proposal published in October, the 12th upgrade would introduce a number of significant improvements to the Tezos network. These include a Kernel-based optimistic view, consensus keys for “bakers” on the network, an improved ticketing system, and pipelining.

XTZ says no to the Coinbase effect

Data from cryptocurrency price tracking platform CoinMarketCap showed that prior to Coinbase Japan’s confirmation that it now supports XTZ trading, the alt traded for a high of $1.02.

While the price started falling before the announcement, as mentioned earlier, it continued to drop after the news broke. This contradicted the popular Coinbase effect, where many believe that listing a coin on Coinbase would cause an increase in the coin’s price.

In a 2021 report titled “Analyzing the Crypto Exchange Pump Phenomenon,” Messari’s Roberto Talamas analyzed the performance of some tokens within the first five days of being listed on Coinbase. Talamas found that when tokens are listed on Coinbase, they record an average price growth of 91% in the first five days of listing.

The Coinbase effect may not be playing out in the current market, as the year so far has been plagued with a series of problems, from failed projects to a market downturn exacerbated by the sudden collapse of FTX.

XTZ on a daily chart

After the demise of FTX in early November, the price of XTZ is down 27%. XTZ traded at $0.993 and was trading at levels last seen in March 2020. Year-over-year, the price of XTZ is down 78%.

Since the collapse of FTX, sellers have controlled the XTZ market. The Directional Movement Index (DMI) showed that their strength (red) surpassed that of the buyers (green) on November 8, shortly after the FTX debacle began.

At the time of writing, the sellers’ strength at 23.43 was firmly above that of the buyers at 14.31.

Furthermore, a key indicator such as the Relative Strength Index (RSI) pointed to the severity of the XTZ sell-off that has taken place since the collapse of FTX. The RSI was still going at the time of writing and rested at 38.62.

Source: TradingView

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