93 Interactions, 2 Today
The XTZ price surge, which was mostly driven by Tezos’ foray into the NFT arena, has resulted in a textbook bearish structure.
A recent price surge in the Tezos (XTZ) market threatens to fatigue by triggering a classic bearish pattern.
The “ascending broadening wedge” pattern appears when the price oscillates between two ascending but divergent trendlines. According to its author, Thomas Bulkowski, these wedges reveal less about buyer tiredness and more about sellers’ desire to seize power, implying that buyers tend to lose supremacy if the price touches the top trendline.
XTZ’s 250%-plus price rally from its July 2021 low of $2.08 has led to the ascending broadening wedge’s formation. On Monday, the cryptocurrency tested the structure’s upper trendline as resistance (around $7.5) to eye an extended upside move towards its previous record high of $8.76.
But the price corrected, confirming strong selling sentiment near the wedge resistance. It now risks enlarging its correction towards the lower wedge trendline (near $5), based on similar pullback moves spotted since July 2021.
As a general rule with ascending broadening wedge patterns, the price should eventually break below the structure’s lower trendline and target the lowest point, i.e., around $2.38 in Tezos’s case.
Central charts note that almost 80% of ascending broadening wedge exits are bearish. Meanwhile, the price falls towards the bearish target six out of ten times.
Despite an unsettling technical situation, Cardano (ADA) is expected to maintain its positive bias based on the proof-of-stake blockchain adoption.
Doja Cat, an American composer, rapper, and vocalist, just debuted her nonfungible token (NFT) collection on OneOf, a digital art collectable marketplace based on the Tezos blockchain. Her announcement corresponded with a 42.65% increase in the ADA/USD during the September 9 and 10 trading sessions.
NFTs have emerged as one of the most active trades this year, with OneOf’s main rival OpenSea reporting $3.4 billion in volume in August.
Meanwhile, Ethereum hosts the majority of NFT projects, although high transaction costs have become an issue. As a result, many new NFT projects have chosen Ethereum’s less expensive alternatives.
Solana’s native asset SOL, for example, has increased by 825 percent since its July 20 low, owing mostly to the success of Degenerate Ape Academy, an NFT project, and Sam Bankman-crypto Fried’s exchange FTX’s decision to integrate Solana on their NFT platform.
A similar craze assisted in pushing the demand for XTZ tokens higher in the past seven days.
— Altcoin Daily (@AltcoinDailyio) September 9, 2021
Last month, Tezos also received a boost from Europe-based banks Crypto Finance Group, InCore Bank, and Inacta. The firms announced that they would use the Tezos’ DAR-1 token standard to issue their native tokens.
Additionally, InCore revealed its plans to launch of institutional-grade storage, staking, and trading services XTZ, raising prospects that wealthy investors would want to invest in the Tezos token in the near future.