AMP Trades Negatively in the Short Term: Is It Failing?
AMP was developed by crypto payments company, Flexa, founded in 2018 by a group of crypto enthusiasts. Flexa was initially funded by multiple ICOs under which it raised through large venture capital firms. After starting their operations in the United States with just Bitcoin, Ethereum, and Gemini Stable Coin, Flexa expanded its business in Canada while adding Zcash and Litecoin to its payments gateway.
Soon, Coinbase launched Flexa coin to its digital tokens list for trading, and within a few hours, Flexa posted about their new token AMP. The reason for creating AMP was the inability to upgrade the existing Flexa coin smart contracts to meet up with the latest developments. All FXC holders were allowed to convert their holding into AMP in a 1:1 ratio. AMP was finally listed on major crypto trading platforms, including Coinbase, Binance, and Gemini, and has created huge buzz ever since.
Difference Between Flexa and AMP
Flexa crypto token and AMP work on separate technology. A payments protocol makes it possible for users to pay using 22 different cryptocurrencies and four stable coins to over 40,000 merchants across the US and Canada. Flexa converts your crypto holdings to any of the fiat currencies chosen by the merchants accommodating faster transactions. Since Flexa was not open-sourced and people required a KYC to use their network, it couldn’t cope with the advancements in the crypto world concerning privacy and anonymity.
Fast forward to one and a half years later, AMP was developed as an open-source platform, allowing companies and merchants to use AMP as their payments gateway. AMP is meant to be used as collateral for any cryptocurrency transaction made using the Flexa payments system.
When paying for any purchase to your merchant, for example, using crypto such as Bitcoin. The merchant network needs to get 12 confirmations equalling 12 blocks, which would require 30 minutes in the case of Litecoin, much higher in the case of Bitcoin and Ethereum. The chances of a transaction failure could take a lot of time to recuperate, resulting in losses to merchants.
An amount of AMP token valuing a little over your transaction value is blocked in a smart contract to resolve these issues. Hence in case the transaction fails, the collateralized AMP tokens will be liquidated into fiat currencies. Higher collateralization ensures that any change in the actual crypto market wouldn’t affect the total amount due to the merchant.
AMP Token Price Analysis
AMP crypto token has performed outright in a positive domain since the beginning of 2021. From a low of $0.005012, it touched a lifetime high of $0.121950 in June 2021, and unlike major crypto tokens, AMP remained in positive territory. The price movement has been positive from a long-term perspective and seems to respect its long-term trend line indicated in grey color.
Every time the value of actual cryptocurrencies falls, the AMP token will be worth more because of being collateralized. Hence, AMP could even be used for hedging major crypto holdings. In the long run, the value of AMP will be worth more. Currently, only 43% of AMP tokens are circulating in the market, and there are over 92 billion AMP tokens. Being worth $2 billion, speculated a stronger demand for AMP to hedge their crypto holdings meant for payments purposes.
Since long-term usage of crypto payments will increase, there will be an exponential increase in the use of such collateralized crypto tokens. Hence holding or getting more coins during the consolidation phase is the best move. On short-term price action, AMP is down by more than 50% when major cryptocurrencies have grown stronger in the last month.
There is a breakdown from $0.057829 levels, and a strong buying sentiment is witnessed at $0.0500 levels. AMP token has strong support at 200 DMA, which coincides at $0.05 levels. Breaching this level can help AMP coins enhance to new lows, but rising demand for hedging should provide some relief to any downtrend movement on AMP tokens. Based on AMP price prediction, there should be a good price movement in the coming days as AMP develops a flat bottom pattern. RSI levels are trading at neutral levels bullying the heightened demand for this token.
