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Chiliz Price Up 30% Following Dragon8 Hard Fork Rollout — Can CHZ Rally to Yearly Highs?

Last Updated May 31, 2024 8:45 AM
Valdrin Tahiri
Last Updated May 31, 2024 8:45 AM
By Valdrin Tahiri
Verified by Peter Henn

Key Takeaways

  • Chiliz’s Dragon8 hard fork went live on the mainnet on May 21, preceding a price increase that nearly led to a yearly high.
  • The CHZ price started an upward movement after bouncing above support on April 13, which accelerated on May 23.
  • After three unsuccessful tries, will the third attempt push CHZ above the yearly high resistance of $0.162?

Chiliz started 2024 with a bang but has corrected since reaching a yearly high in March. All-in-all, the price has increased by 65% since the start of the year. The increase accelerated on May 23, two days after the Dragon8 hard fork went live on the mainnet.

During the upward movement, the price has moved above the $0.120 area and reached the final resistance at $0.160. While it failed to break out, resistances weaken the more times they are touched. So, the attempt raises the possibility that CHZ will finally break out and reach a new yearly high.

Chiliz Approaches Yearly High

The CHZ price has increased alongside an ascending support trend line since October 2023. The trend line was most recently validated on April 13 (green icon). CHZ has increased since, breaking out from the $0.120 horizontal area and validating it as support. The rally accelerated on May 23 and nearly led to a yearly high on May 30.

Even though the price fell afterward, creating a bearish candlestick, the upward trend is still intact. Additionally, CHZ has made three unsuccessful breakout attempts until now (red icon), weakening the $0.162 resistance area.

The daily RSI and MACD both support the increase, since they are trending upward and above 50 and 0, respectively.

Chiliz Price Increase
CHZ/USDT Daily Chart | Credit: TradingView

Finally, the wave count suggests CHZ is in wave four of ta five-wave increase. After wave four ends, the next increase is likely to take the CHZ price to a new yearly high. The 0.618 Fibonacci retracement resistance at $0.204 creates this target.

Despite the bullish outlook, falling below the wave one high (red) at $0.131 will invalidate the count. Then, CHZ could decrease to the $0.12 horizontal support area, which nearly coincides with the long-term ascending support trend line.

Dragon8 Hard Fork Launches on Mainnet

On April 30, the Chiliz team announced the launch  of the Dragon8 hard fork, which is set to go live on May 21. The hard fork will introduce a new tokenomics structure, with decreasing annual inflation and a burn mechanism. In turn, it will give CHZ some governance and operational usage.

After the Dragon8 hard fork, inflation will start at 8.8% annually and will fall to 1.88% after 14 years, when the maximum supply of 15 billion will be reached. It is worth noting that supply will increase by 70%  from its current 8.8 billion.

The reason for the increased supply is the current inability to reward ecosystem contributors with new emissions.

HBAR, DYDX & ETH
Custom Daily Chart | Credit: TradingView

It is worth noting that hard forks do not necessarily lead to price increases. Hedera had its hard fork on January 9 and fell for several months afterward before eventually starting its upward trend. Meanwhile, dYdX implemented a network upgrade on January 29 and has fallen over 25% since.

However, Ethereum’s Dencun upgrade on February 7 led to a parabolic rally toward the all-time high. So, results following a hard fork are mixed.

In any case, the CHZ price bounced on May 21 and reclaimed its previous horizontal resistance area.

Chiliz Reclaims Resistance

The daily time frame chart shows that Chiliz has increased alongside an ascending support trend line for the past 222 days. More recently, it bounced at the trend line on April 13, creating a very long lower wick. It has increased since without returning to the trend line.

On May 20, the Chiliz price increased 10%, moving above the $0.120 horizontal area. This is an important horizontal area since it previously provided support. CHZ has moved above this area twice before (red circles) but failed to sustain the increase. It remains to be seen if this time will be different.

Chiliz Completed Movement
CHZ/USDT Daily Chart | Credit: TradingView

Technical indicators are leaning bullish. Both the RSI and MACD are trending upward, the MACD just moved above 0 and the RSI increased above 50. However, this also happened in the two previous breakout attempts, which were unsuccessful. So, the indicator readings cannot confirm the validity of the breakout.

Finally, the wave count supports the continuing of the increase. Since the yearly high in March, CHZ has completed an A-B-C corrective structure, ending with the aforementioned April 13 low (green icon).

If the count is accurate, CHZ has started a new upward movement. In this possibility, the price will first increase toward the $0.160 resistance area before eventually breaking out and moving to new highs.

Chiliz Could Increase Toward its Yearly High

The Chiliz Dragon8 Hard Fork’s impact remains uncertain, but CHZ’s price action shows bullish momentum. The wave count implies the correction ended on April 13 and a new upward trend started afterward. The price has confirmed the breakout above the $0.120 resistance. After CHZ increases above the $0.162 resistance, it can gradually increase to a new yearly high.

Disclaimer
Please note that the contents of this article are not financial or investing advice. The information provided in this article is the author’s opinion only and should not be considered as offering trading or investing recommendations. We do not make any warranties about the completeness, reliability and accuracy of this information. The cryptocurrency market suffers from high volatility and occasional arbitrary movements. Any investor, trader, or regular crypto users should research multiple viewpoints and be familiar with all local regulations before committing to an investment.
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