Its been a while since the Chiliz network was in the spotlight, but it is back courtesy of its recent spike in activity. But is this spike in activity a temporary event, and will it translate into robust demand for CHZ？
Chiliz concluded June with a massive spike in network activity. For context, transactions on the network surged from as low as 40,000 TXs on 20 June to around 260,000 TXs by 30 June.
The massive 550% spike in transactions was accompanied by a 3,000% surge in the number of active addresses during the same period.
To put address activity into perspective, the network had less than 2,000 active addresses prior to 29 June. That figure has since surged to over 30,000 active addresses as of 3 July.
So what exactly was the reason for the renewed surge in network activity？ The hype may have been fueled by prospects of more fan tokens potentially being launched soon, as the Socios ecosystem continued attracting more teams.
In addition, the Chiliz team recently launched a major hackathon to attract developers into its ecosystem. This may have contributed to the surge in address activity.
Why Speculative Hype Around Chiliz Could be Soaring？
Speculation around the Chiliz native token CHZ was also another potential reason behind the surging network activity. While the surging network activity may trigger more organic demand, there were other factors that may attract more speculative forces into CHZ.
The level of profitability for CHZ holders was quite low. Recent Glassnode data revealed that the supply at a loss hovered at historic highs, hence very low incentive for profit-taking.
CHZ Supply in Loss | Source: Glassnode
The data also revealed that less than 10% of the CHZ in supply was at a profit. This was largely because the cryptocurrency maintained an overall bearish trend since December.
CHZ has also given up most of the attempted gains in its past, and it traded close to its historic low. In other words, many analysts thought that it was extremely discounted. But did this translate to accumulation more recently？
Assessing the Chances of a Bullish Build-Up
CHZ had a $0.034 press time price tag, which represented a 73% discount from its December 2024 top.
However, that discount was minimal compared to its historic top. The cryptocurrency traded at a 96% discount from its historic top.
CHZ Price Action | Source: TradingView
CHZ has been showing signs of relative strength build-up. For example, its RSI jumped back above its 50% level after a brief stint in oversold territory just 10 days prior.
Similarly, its MFI signaled positive liquidity flows. The fact that the Chiliz network experienced a surge in activity in the last few days may bring attention back to CHZ.
Investors might find it attractive, especially considering the heavy discount. However, these factors did not guarantee a robust comeback for the CHZ token.
Spot flow data revealed that demand was yet to make a major splash large enough to offer a solid confidence boost.
On the derivatives side of things, the level of open interest remained relatively low at less than $20 million.
While these findings were not exactly signs of strong bullish activity, sustained network activity could potentially attract more attention back into the Chiliz ecosystem.
Whether or not the CHZ price will make a major comeback with sustained upside will still depend heavily on the Chiliz networks ability to sustain robust activity.