The price of LEO, the native token of the iFinex ecosystem, saw a slight 0.29% increase over the past hour to trade at $3.92 at the time of writing. With a market capitalization of $3.63 billion, LEO ranks among the top 30 cryptocurrencies by market cap.
In this technical analysis, we will look at the key metrics around LEO's price action over the past day, week, month and 6 months. We will also provide an updated prediction on where LEO's price could be headed based on current momentum.
Summarizing the Data
Over the past 24 hours, LEO has seen relatively muted price action, increasing by just 0.10% overall. Trading volume during that period totaled $271,400, significantly below average for LEO.
Looking at longer timeframes, LEO has posted gains of 1.93% and 17.15% over the past week and 6 months respectively. However, over the past month, LEO has declined slightly, dropping 0.48%.
LEO's lackluster price performance over the past month can likely be attributed to the overall weakness in the cryptocurrency markets. Major cryptocurrencies like Bitcoin and Ethereum have pulled back from their 2021 highs and LEO has followed suit.
However, LEO's solid gains over the past week and 6 month period point to it holding up better than broader market conditions would suggest. LEO benefits from being the native token of the iFinex ecosystem which includes the Bitfinex exchange. Demand for LEO from Bitfinex users helps provide a degree of support.
Now let's take a deeper look at the key factors influencing LEO's price action and updated predictions for where it could be headed next.
Trading Volume Slump Indicates Waning Investor Interest
The 24 hour trading volume for LEO of just $271,400 is quite low compared to average daily volumes which can exceed $5 million. This large volume decline signals that investor interest in LEO could be waning in the near term.
Low trading volumes make it more difficult for LEO to mount any sustained uptrend. Without significant new inflows of trader capital, upside momentum will likely remain limited.
If trading volumes continue declining in the sessions ahead, it could precede additional downside for LEO, particularly if overall crypto market sentiment remains weak.
Near Term Resistance Around $4.10 Caps Upside Potential
Looking at LEO's price chart, we can see that it has struggled to break above the $4.10 level over the past several weeks. This price zone has emerged as a strong area of resistance on multiple occasions.
After reaching the $4.10 in mid-August, LEO lost steam and pulled back sharply lower. More recently, LEO failed to break above $4.10 again in late August as sellers emerged.
With LEO again approaching $4.10 in September, traders should watch for a potential rejection and pullback from this level if resistance holds firm. A break above $4.10 would be an extremely positive technical sign and could pave the way to further upside.
But until LEO can definitively break above and hold $4.10, additional gains may remain limited in the near term.
LEO Price Prediction for the Next 6-12 Months
Given the stagnant price action and lack of bullish momentum for LEO recently, my prediction is for continued rangebound trading in the $3 to $4 channel over the next 6-12 months barring any shock events.
I expect LEO will closely track overall crypto market conditions during this period. If the crypto markets see renewed momentum, LEO is likely to rally back to the top of its trading range near $4.10.
However, risk factors like rising inflation and tightening monetary policy point to potential crypto weakness ahead. In that scenario, LEO could decline back toward the $3 support level over the next 6-12 month period.
One potential catalyst that could signficantly lift LEO's price is a ramp up in utility and adoption of the token inside the iFinex ecosystem. If the company unveils new LEO staking incentives or use cases, upside could be considerably higher.
Barring a breakout in utility, technical traders should watch for a downside breakdown or upside breakout from LEO's current trading range between $3 and $4 to signal the next major trend.
Will High Inflation Favor Crypto as an Inflation Hedge?
With inflation in the U.S. reaching its highest levels in decades, investors are increasingly searching for assets that can help hedge against rising prices. Some analysts argue that cryptocurrencies like LEO have potential to gain value during high inflation environments.
Cryptocurrencies have a strict supply cap written into their code, preventing excess token minting as is often done with fiat currencies when inflation rises. The scarcity created by crypto supply caps could make them more appealing than eroding fiat currencies.
However, crypto's potential as an inflation hedge is still unproven. During the 1970s when inflation last reached extreme levels in the U.S., cryptocurrencies obviously did not exist.
While the argument for crypto's inflation-hedging abilities makes theoretical sense, real world data is still limited. Crypto returns could end up closely correlating with other risk assets like tech stocks rather than acting as an inflation hedge.
In LEO's case specifically, its price action over the past 6 months does not clearly show it acting as an inflation hedge. LEO has traded largely flat since March despite U.S. inflation steadily rising over that period.
More time is needed to evaluate whether LEO and other cryptos end up living up to their purported inflation hedging properties. But it remains a key narrative in favor of crypto bulls to watch closely.
Is LEO's Use Case Outside Speculation Strong Enough?
Unlike many other major cryptocurrency projects, LEO lacks a clearly defined use case outside of speculative trading and investment demand. The token's primary utility remains exchange-based: receiving reduced fees on Bitfinex and participating in initial exchange offerings.
For investors focused on the real-world utility of crypto assets, LEO's comparatively narrow use case is a concern. Competing exchange tokens like BNB have expanded into far more real world functions like decentralized finance and NFT marketplaces.
Unless LEO can successfully expand its utility for actions beyond exchange trading incentives, it may struggle to attract significant new demand from utility-focused investors. Relying largely on speculative demand leaves LEO vulnerable to investor sentiment turning negative.
Expanding LEO's utility into decentralized finance, NFTs, metaverse applications or other growing crypto sectors would be a major boost to its investment case. Until such efforts materialize, doubts around LEO's long-term use case beyond exchange speculation will persist.
In summary, LEO faces a number of headwinds in the near to medium term that will likely keep prices rangebound between $3 and $4. Declining trading volumes, overhead resistance and a lack of bullish momentum all point to limited upside over the next 6-12 months.
While inflation hedging potential and developments around utility remain wildcards worth monitoring, LEO looks set to closely track overall crypto market conditions for now. Traders should keep an eye on LEO's trading range boundaries at $3 and $4 for signs of the next decisive price trend emerging.