The Graph: A look at Q4 2022 performance and current state of GRT

• The Graph logged significant ecosystem growth in Q4 2022.
• GRT’s price might be due for a reversal with a bearish divergence spotted on the daily chart. 

According to a recent report from Messari titled “State of The Graph Q4 2022,” the open-source and decentralized indexing protocol for blockchain data The Graph, experienced growth in key ecosystem metrics during the fourth quarter of 2022.

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The Graph is an open-source, decentralized protocol for collecting, processing, and storing data from blockchain applications for easy information retrieval.

Deployed on the Ethereum blockchain, it helps developers to increase the efficiency of their decentralized applications (dApps) by using relevant data. 

The Graph analyzes and stores blockchain data in indices called Subgraphs, allowing quick responses to queries sent to its protocol. In an assessment of its Q4 2022 performance, Messari found that since the launch of the first subgraph on The Graph’s mainnet in Q1 2021, the count has increased consistently. 

As of December 2022, there were 618 active subgraphs on the mainnet, a 25% increase from the previous quarter and a 151% increase from the previous year. According to Messari, the growth of active subgraphs on the protocol is expected to continue over the next several quarters.

Source: Messari

The Graph’s ecosystem comprises Indexers, Curators, and Delegators. The Indexers operate Graph Nodes to process and store on-chain data.

Curators on the protocol signal to Indexers which subgraphs are worth indexing, while Delegators are ecosystem participants who may lack the technical know-how or resources to index, and they are allowed to delegate GRT to Indexers.

The Graph’s mainnet operates through a fee-based system, where data consumers pay a fee per query to Indexers. Query fees are further distributed to Delegators and Curators.

Curators are incentivized to signal quality subgraphs and earn a share of the query fees. According to the report, as of December 2022, curators were signaling over 26 million GRT towards active subgraphs.

Further, in Q4 2022, the count of these various participants increased. According to Messari, the number of Indexers on the network went up by 33%, while the count of Curators rallied by 2%.

As for Delegators on The Graph, they increased by 9% within the three-month period under review. 

Source: Messari

Realistic or not, here’s GRT’s market cap in ETH’s terms

A second look might save you from losses

On a year-to-date basis, GRT’s price has grown by 64%, per data from CoinMarketCap. At the time of reporting, key momentum indicators on the daily chart showed that the asset was continuing its upward trend.

Its Relative Strength Index (RSI) and Money Flow Index (MFI) were positioned far from the neutral zones at 67.62 and 77.59, respectively. 

Likewise, the alt’s On-Balance Volume was northbound at 9.073 billion. However, an assessment of GRT’s Chaikin Money Flow (CMF) revealed that the uptrend might not be as strong as it appeared. It was positioned downwards resting on the center line at zero. 

When an asset’s price and key momentum indicators increase while its CMF declines, it may indicate that the asset’s price is rising due to buying pressure.

However, the uptrend may not be as strong as it appears and typically signals a potential trend reversal or a period of consolidation.

Source: GRT/USDT on TradingView