After rallying 207% since Black Thursday, Tezos pulled back 5.69% but is the rally to a new all-time high over?
Since dropping to a 2020 low at $0.93 on March 12, Tezos (XTZ) had been absolutely on fire, gaining 207% and within close distance of its all-time high at $3.96. For investors, the only question left now is, when will it stop?
Crypto market daily performance. Source: Coin360
Typically such large moves begin to show signs of overextension as the asset becomes overbought and traders eventually decide to take profits. At the moment Tezos appears to be correcting a tad bit as the price has pulled back 5.69% since reaching a monthly high at $2.90, but is the uptrend over or is a period of consolidation beginning?
Let’s take a closer look at Tezos to see if there are signs that the current uptrend can continue.
BTC USDT daily chart. Source: TradingView
Although XTZ has been on a tear in both its BTC and USDT pairs, the altcoin has encountered resistance at the 61.8% Fibonacci retracement levels just as Bitcoin (BTC) and many other altcoins are at the moment.
As can be seen on the daily chart, XTZ formed a near tweezer-top at $2.85 before pulling back below the 61.8% Fib level. The recent move above $2.58 pushed XTZ price above the ascending channel but prior to this each 25%+ move higher was followed by a retest of the underlying support so the current pullback could simply be a repeat of XTZ’s previous price action.
Currently the price is held up by the high volume VPVR node at $2.72, but a drop below this level would likely bring the price to the top channel of the ascending channel where there is support at $2.59. Below this, traders will look for a bounce at the 50% Fib level ($2.44). Below the 50% Fib level the next support is at $2.35. The relative strength index has turned down slightly but remains above the ascending trendline and in the bullish zone.
BTC USDT 4-hour chart. Source: TradingView
On the 4-hour timeframe traders will notice that the MACD has pulled below the signal line and the high volume surges that carried the price to new daily highs have all but vanished. Currenty XTZ trades below the Bollinger Band moving average and as mentioned earlier the VPVR again shows that below $2.72 there isn’t much demand until $2.35, slightly below the 50% Fib level.
For the short-term trader should watch the shorter timeframes to see if XTZ can begin to form a pattern of higher lows and then set a 4-hour close above $2.79 and $2.85. Alternatively, traders can wait for a breakout above $2.92 as the VPVR on the daily and 4-hour timeframe show minimal resistance above this level.
The views and opinions expressed here are solely those of the autho and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.
