81 Interactions, 4 Today
As the weekend neared, most altcoins in the top 50 struggled to broaden their rebound after Bitcoin fell to $45,000. Polkadot and Kusama surprised the market with solid gains, although Tezos seemed to be leading by example.
XTZ registered another 33% hike and formed a new local top at $6.4. Bullish sentiment also ran high after American rapper Doja Cat launched an NFT collection on the Tezos platform a few days ago. However, a deeper dive into the hourly chart suggested that some profit-taking had started to kick in.
Tezos Hourly Chart
On September 7, XTZ, like most of its peers, succumbed to a broader market sell-off. Because this also corresponded with XTZ’s up-channel collapse, losses from the bottom trendline totalled roughly 30%. A few candlewicks fell as low as $3.88, a two-week low for the digital asset.
Surprisingly, the $2.88 region was very important in the XTZ market. From February to March, the support line spurred a series of rallies. The most recent increase occurred barely a week ago, following XTZ’s abrupt collapse from $4.5 to the aforementioned support.
As a result, the price increased by 40% to $5.4. This was the case once more, as buyers reacted quickly to XTZ’s breakdown.
On the downside, there has been some choppy action in the recent several hours. Some of the losses were attributed to high volatility, as XTZ fell from $6.4 to $6 at the time of publication. If sellers do press on, the $5.65-$5.77 defensive zone would be the best option to boost XTZ’s near-term movement.
If the downward pressure does not abate, the $4.54 support line may be activated. A closing below a crucial support level at $5, on the other hand, might be detrimental to XTZ’s bullish structure.
XTZ’s indications were all easing from severe levels. On the MACD, buying pressure was steadily fading, and a bearish crossover loomed huge. The Awesome Oscillator, which was trading at a multi-month high, also showed a string of red bars.
Meanwhile, the RSI had descended from overbought levels and was approaching the half-line. In the long run, such a reading would be beneficial because it would allow XTZ to stabilise before the next rise.
XTZ seems to be considering a few support lines in order to reduce incoming losses. This would allow its indications to reset before the market’s next wave of purchasing pressure. Meanwhile, traders might go long at the aforementioned support levels in order to profit from the following rise.
However, traders should be wary of a close below $5, since this would encourage short-sellers to enter the market.