In a previous Tezos analysis, a short position with a risk-to-return ratio of 1.69 was provided. The price not only followed through with short targets, but headed even lower [$2.77], providing total profits of 13.84% if the position stayed open.
At the time of writing, Tezos [XTZ] was trading at $3.06, with its price registering a 3.63% surge over the last 24-hours. However, that surge will come to an end soon, which is why shorting Tezos would be the best way to go about it.
Tezos 1-hour chart
Although the surge over the last 24-hours was a good one, it has diverged from the RSI indicator, thus creating a bearish divergence. This is the main reason for the short position, in addition to the resistance at $3.063 which was flipped recently into a support level. This R/S flip is still not set in stone. Therefore, a short position here [at $3.063] would be profitable should the flip not occur successfully.
As for the stop-loss shown in the chart above, it is at $3.145; however, it can be adjusted based on the amount of risk one is willing to take. As always, narrow stop-losses will often close the position, especially considering the volatile nature of cryptocurrencies.
The first short position is on the conservative side with a target at $2.91, ie., decline of 4.69%. The second position, however, looks to maximize the profit by taking on more risk. The second target is at $2.771, which also happens to be the support XTZ bounced off on 14 and 21 July.
The MACD and Aroon indicators, although not seen in the chart, indicated an incoming bearish crossover, further confirming the short position.
With altcoin dominance only 11% lower than the mid-February 2020 levels, this phase seems like a good time to increase profits by trading altcoins. With Bitcoin showing small signs of life after being dormant for more than a week, people have shifted to alts. DeFi is also a caveat to this increasing altcoin popularity.
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