Celestia’s TIA rises amid network upgrade, but faces one key risk

Modular data network Celestia rose for three consecutive days after developers provided an update on an upcoming upgrade.

Celestia (TIA) token rose 60% from this year’s low to $6.28, reaching $1.3 billion in market capitalization. It remains 72% below its all-time high of $21.10.

Celestia has made a lot of major headlines over the past few weeks. In September, it raised $100 million from Bain Capital, Robot Ventures and Placeholder. This fundraising brought its total funding to $155 million, making it one of the best-funded players in the crypto industry.

The fundraise comes as developers and the community work to scale the network to handle 1 gigabyte blocks.

In a statement this week, Celestia Labs announced results from its Mammoth Mini testnet, which will implement 88 MB blocks with an average throughput of 27 MB/s. Considering that the network currently processes 2 MB blocks every 12 seconds, this is a significant step as the network moves towards blocks of 1 GB and above.

The Mammoth Mini testnet will now transition to a public testnet, followed by a switch to the mainnet in 2025, pending community approval. Cryptocurrencies usually perform well before major updates.

The Mammoth Mini upgrade follows the Shwap upgrade that was implemented a few months ago. Shwap makes data sampling 12x faster and reduces storage requirements by approximately 16.5x.

The biggest risk that could affect Celestia’s price is the major token unlock scheduled for October 31. The network will unlock 175.74 million tokens worth $175 million, accounting for 16.3% of the total supply. Unlocking tokens may lead to dilution affecting existing holders, especially those who earn through staking.

Celestia rises to significant resistance

The daily chart shows that the TIA token is trading at $6, coinciding with the top of the descending trend line. This trend line connects the highest swings since June of this year.

Celestia broke above the 100-day and 50-day Exponential Moving Averages. Additionally, the Relative Strength Index has risen above the neutral point at 50, while the Percentage Price Oscillator has crossed the zero line.

Celestia also formed an inverted head and shoulders pattern. Therefore, a break above the trend line could lead to further gains and potentially reach the psychological level of $10.