Key Takeaways
Tezos (XTZ) has been in a consolidation phase following a substantial downtrend, showing potential signs of a new bull phase.
With key support levels tested, XTZ’s next moves will determine whether a breakout is on the horizon.
The price of XTZ was in a bull phase from last October until March 12, 2024, when it reached a yearly high of $1.60.
As the five-wave uptrend concluded, the price reversed and was in a downtrend until Aug. 5, when it came down to $0.60.
This is the lower level of the horizontal support zone dating from the beginning of 2023, but the lowest price fell as it quickly spiked to $0.54 at its daily chart wick.
Since then, it formed a symmetrical triangle, which could imply consolidation.
Considering that the price previously depreciated by nearly 70%, reaching the oversold zone, the symmetrical triangle could be the final bearish structure before XTZ starts a new bull phase.
Looking closer at the hourly chart and analyzing the wave structure in the symmetrical triangle, we can see that a five-wave pattern was developed.
This could be an ABCDE correction as the ending wave of the higher degree WXY or a complex WXYXZ correction count.
Either way, since XTZ tested its ascending support level on Oct. 26 and made a slight bounce, more upside could be seen.
There are still no major signs of a coming rally, but the price usually reverts to the trend after these consolidation patterns, especially after a long-lasting trend.
The strongest confirmation will be the breakout direction and establishment of a higher support plateau.
This is why XTZ must go above $0.70 and stay on the subsequent decline to ensure the coming bull phase.
If this plays out and the price starts developing a five-wave pattern before a three-wave retracement to a higher low, we can anticipate a sustained rally leading to $1 at first and continuing later in 2025.