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Tezos Breaks Above Multi-Year Resistance, Rally Setup

XTZ could continue to rise without too much resistance.

Tezos broke above a significant price barrier, which was previously keeping its price contained. Moving above this resistance could set the stage for a major bull run.

Tezos Reaches a New All-Time High

Over the last 24 hours, Tezos surged by nearly 24%. The bullish impulse allowed it to finally turn the $1.80 resistance level into support. This significant price hurdle was preventing XTZ from reaching higher-highs since September 2018, when the token was launched. Now, it seems like Tezos could be preparing for a parabolic move.

XTZ/USD chart by TradingView
XTZ/USD by TradingView

As a matter of fact, an inverse head-and-shoulders pattern appears to have developed on XTZ’s 3-day chart. This technical formation estimates a momentum reversal from bearish to bullish. The recent move above the $1.80 resistance level, also known as the neckline, could be the catalyst for a substantial price increase.

This bullish pattern projects a 60% surge that could take the price of Tezos to $2.90. This target is determined by measuring the distance between the head and the neckline and adding it to the breakout point.

XTZ/USD chart by TradingView
XTZ/USD by TradingView

On its way up, Tezos could find resistance around the 127.2% and 161.8% Fibonacci retracement level. These hurdles sit $2.14 and $2.52, respectively.

XTZ/USD chart by TradingView
XTZ/USD by TradingView

Despite the bullish outlook, the TD sequential predicts that a retracement could soon be underway. This technical index is currently presenting a sell signal in the form of an aggressive 13. Additionally, another bearish signal could be given in the form of a green nine candlestick three days from now, on Feb. 6.

XTZ/USD chart by TradingView
XTZ/USD by TradingView

The bearish formation forecasts a one to four candlestick correction that could take XTZ down to test the $1.80 level for support. An increase in selling pressure that sends this coin below this level of support could trigger a steeper correction ⁠— to the 78.6% or the 61.8% Fibonacci retracement levels at $1.60 and $1.42.

Now, it’s a battle between whether XTZ will hit the target presented by the inverse head-and-shoulders pattern or if its price will first retrace from current levels.

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