Is THETA a ‘buy’ ahead of major network upgrade in Q4?

YEREVAN (CoinChapter.com) – Theta Network (THETA), a decentralized video streaming protocol, will transition to the 4.0 version dubbed Theta Metachain in Q4 2022. So is THETA a profitable investment despite its 92% plunge from Apr. 2021 all-time high?

Theta network upgrade – Metachain.

Theta announced the upcoming upgrade in April 2022, providing the whitepaper for the 4.0 mainnet. The document states that Metachain is a scalable, flexible, and customizable solution for different use cases. It is also permissionless, so “any entity or person can take advantage of these benefits.”

The Theta Metachain is an interconnected network of blockchains, a “chain of chains”. The goal is to allow permissionless horizontal scaling of the Theta network to achieve potentially unlimited transactional throughput, and 1-2 seconds, or even subsecond block finalization time.

read the whitepaper.

Theta claims that in the current Web 2.0 era, big companies like Netflix take 80% of the created value. The remaining 20% is then evenly distributed between the creators and the users. The protocol proposes to change that by powering Web 3.0 development.

Also read: Theta Network rallies after NFT collaboration with Samsung.

However, the question remains if the ambitious network upgrade will be enough to fight the overall bearish market sentiment and promise investment returns. As of July 13, THETA lost over 90% of its 2021 $16 peak and stood at just over $1.

THETA risks a selloff on bearish technicals

In detail, the digital asset formed a bearish reversal setup dubbed the Bear Flag. The latter typically occurs after a sharp drawdown. It features a period of consolidation between two parallel trendlines that takes the price slightly higher before continuing on a bearish path. The setup formed on May 12, after a 30% plunge.

Moreover, the Bear Flag’s target drop equals the decline preceding the Flag, i.e., the flagpole. THETA daily chart pinned the expected price at approximately 0.6, or over 40% lower than the current value.

The chart above also registered lowering trading volumes that confirm the selloff fears, showing passivity among traders.

Also read: Theta Network token rallies 24% in 24 hours after Replay platform launch.

In conclusion, while THETA fundamentals look strong, citing the Theta Metachain 4.0 launch. However, a solo rally in a bearish broader market seems unlikely. The Federal Reserve’s hawkish policy and intensifying recession fears might dampen the crypto market’s bullish hopes.

Conversely, if the said scenario doesn’t play out and Bitcoin bottoms out soon enough, THETA might follow suit and, considering the network upgrade, be a good ‘buy.’