What's Next for Chiliz? | Credit: Hameem Sarwar
Key Takeaways
- Chiliz (CHZ) reclaimed the $0.060 horizontal support area.
- CHZ increased in November but created a lower high.
- Is the Chiliz long-term price trend bullish or bearish?
The Chiliz price has increased since Aug. 5, creating several higher lows alongside an ascending support trend line. The most recent was on Nov. 4, leading to a 35% upward movement.
However, CHZ failed to sustain it, creating a lower high on Nov. 12 and declining sharply. Let’s analyze the price movement and see if the price can bounce at the support trend line again or if a breakdown is in store instead.
Chiliz Bounces at Support
The Chiliz price has fallen under a descending resistance trend line since March. While doing so, it dropped to a low of $0.043 in August, which caused a breakdown from the $0.060 horizontal support area.
However, the CHZ price bounced almost immediately afterward, implying that the breakdown was just a deviation (black circle). Afterward, CHZ reclaimed the $0.060 area and confirmed it as support, creating a higher low and a bullish engulfing candlestick last week (white icon).
Technical indicators show bullish signs but do not confirm the bullish trend reversal. The Relative Strength Index (RSI) broke out from a descending resistance trend line and is increasing. The Moving Average Convergence/Divergence (MACD) made a bullish cross and is moving upward. However, the RSI is still below 50, and the MACD is below 0.
So, while the weekly time frame price action and indicator readings lean bullish, they are not enough to confirm the bullish trend reversal yet. There is some positive Chiliz news since holders of the Scoville NFT will be rewarded with a PEPPER airdrop . The snapshot will be taken sometime next week.
CHZ Price Weakness
The daily time frame chart shows that CHZ has increased alongside an ascending support trend line since Aug. 5. More recently, it validated it on Nov. 5, starting the ongoing upward movement.
However, the Chiliz price created a lower high than the price on Oct. 15. The high confirmed the $0.070 horizontal area as resistance. The price action resembles a head and shoulders pattern (black icons).
CHZ has declined since confirming the area and risks a 15% drop to the ascending support trend line. Since the head-and-shoulders pattern is a bearish pattern, it is likely to lead to a breakdown.
Technical indicators do not confirm nor deny this since the RSI is at 50 and the MACD is at 0, both signs of an undetermined trend.
Similarly to the price action, the wave count is undetermined. It is possible that CHZ has completed an A-B-C corrective structure and started a new downward movement. This fits with the creation of a bearish pattern.
On the other hand, it is also possible that Chiliz created a leading diagonal and then finished its correction.
As a result, the reaction to the ascending support trend line will be key in determining if the future trend’s direction is bullish or bearish.
Unclear Trend
While the long-term chart shows positive signs, Chiliz’s daily time frame gives an undetermined trend because of both the price action and the wave count.
Once the CHZ price returns to the ascending support trend line, the reaction will be key in determining the long-term trend.
