Tezos has exhibited a sideways movement since August 17, initially plummeting to $0.63. It subsequently experienced a swift recovery to $0.72, representing the upper boundary of this horizontal range. However, it once again revisited its August low on September 11.
Over the past 24 hours, the price witnessed a substantial upward surge, rebounding from the $0.63 mark to achieve a gain of slightly over 16%. At its peak today, October 10, it reached $0.74, but it has since retraced to the $0.70 range, where it currently hovers.
This significant spike occurred despite stagnant Total Value Locked (TVL) and the absence of any other fundamental drivers influencing the price rise.
As observed in the TVL chart, the landscape has remained relatively stable since May 2020, with TVL hovering around the $58 million mark. This period has been characterized by a consistent horizontal trading range, oscillating between $58 million on the upper end and $30 million on the lower end.
XTZ experienced its most recent peak at approximately $9 on October 4, 2021. This surge was a culmination of a multi-year bullish cycle that commenced on December 3, 2018, when the price hit its lowest point at $0.35.
The downward trend commenced on October 4, 2021, leading to a staggering 93% decline, reaching its lowest point at $0.64 on September 11 of this year. This low marked a deeper descent compared to the one observed in December of the previous year when the price bottomed out at the horizontal level of $0.72.
Since its last peak, a persistent descending pattern has taken shape, with the current price challenging its resistance level on the weekly time frame. The Relative Strength Index (RSI), an indicator of overbought and oversold conditions, plummeted to 26.7% during the December low of the previous year but has since edged above the 30% threshold.
Considering the substantial descending resistance and the fact that the price has already dipped below the December low, a rejection appears increasingly likely. Should this rejection materialize, another downturn may arrive, potentially finding support at around $0.50.
On the flip side, if a breakout above the descending trendline materializes, signaling the onset of a bullish phase, the price would need to validate some of the broken resistance levels as support. Ideally, it should remain above $0.87 to establish a bullish trajectory.
When examining the 4-hour chart, today’s price spike managed to breach the horizontal resistance level briefly, resulting in a wick above it. However, the rally was short and the price retreated from the resistance level. Given that the price has not re-entered the established range and has faced rejection from the descending resistance, the question arises as to whether it possesses the potential for another upward reversal.
At the present moment, the overall market sentiment remains undecided and somewhat ambiguous.
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.