Tezos Ready to Surge Despite Crypto Market Correction
Tezos continues consolidating within a narrow trading range, but a particular technical index estimates that pressure for a bullish breakout is coming to a head.
- Tezos has mostly traded between the $2.3 support and the $3 resistance level since late April
- The lackluster price action forced the Bollinger bands to squeeze, which is indicative of incoming volatility
- The TD Sequential indicator forecasts that XTZ is poised to breakout in an upward direction
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Over $15 billion was wiped out of the crypto industry’s market capitalization in the last three days. While most cryptocurrencies experienced losses, Tezos seems to be gearing up for a bullish breakout.
Major Price Movement on XTZ’s Horizon
Tezos entered an impressive bull run that saw its prices triple following March’s market meltdown. The smart contracts token rose from a low of $1 to a high of $3 within 45 days. But after the peak, its price entered a stagnation phase with no clear indication of where it would go next.
This cryptocurrency has mostly traded between the $2.3 support and the $3 resistance level since late April. Only a clear daily candlestick close below or above these critical hurdles will determine the trend’s direction.
Lackluster price action forced the Bollinger bands to squeeze on XTZ’s 3-day chart. Squeezes are indicative of periods of low volatility and are usually succeeded by wild price movements. The longer the squeeze, the higher the probability of a strong breakout.
Since this technical analysis tool does not provide a clear path about the direction of Tezos’ trend, the area between the lower and upper Bollinger band is a reasonable no-trade zone. Trading within this area is quite risky, given that a significant price movement is underway.
Tezos Technicals Flash Buy
Nevertheless, the TD sequential indicator seems to favor the bulls within the same time frame. This technical index recently presented a buy signal in the form of a red nine candlestick. The bullish formation forecasts a one to four 3-day candlesticks upswing or the beginning of a new upward countdown.
A green two candlestick trading above the current green one candle may serve as confirmation of the buy signal. If this were to happen, Tezos might be able to break above the overhead resistance at $3. Breaking above this supply barrier could see XTZ march towards mid-February’s high of nearly $4 or even reach a new yearly high.
Despite the TD setup’s optimistic outlook, investors must remain cautious about a potential break of the $2.3 support level. Losing this hurdle as support would likely jeopardize the bullish scenario and would lead to further losses.
On its way down, the most significant supply barriers that could prevent Tezos from a steeper decline sit around the 50% and 61.8% Fibonacci retracement levels (when measured from the peak of early June of $3.14 to mid-March’s swing low of $1). These critical support walls sit at $2 and $1.8.