Zilliqa Metaverse Hype Ensues, But ZIL Looks Exhausted
Zilliqa looks ready to take a slight dip before advancing further.
- Zilliqa has risen by nearly 370% over the past week.
- Now, sell signals are appearing.
- A spike in profit-taking could push ZIL to $0.155.
Share this article
Zilliqa has soared in price over the past week. Although trading volumes remain high, several signals point to a brief correction in the near future.
Zilliqa Looks Primed to Retrace
Zilliqa has outperformed the rest of the cryptocurrency market over the past few days, but the technicals show that a spike in profit-taking could be underway.
The Layer 1 token has been on a roll lately, surging by nearly 370% over the past week. ZIL entered a parabolic rally last week when the project announced a partnership with Agora for its Metaverse as a Service platform, Metapolis.
ZIL was trading at a low of $0.047 and went on to hit a high of $0.22. Given the magnitude of the breakout, several technical indicators suggest that the token is now sitting in overbought territory.
The Tom DeMark Sequential indicator has presented a sell signal on Zilliqa’s four-hour chart. The bearish formation developed as a green nine candlestick, which is indicative of a one to four candlesticks correction. A spike in selling pressure could validate the pessimistic outlook, pushing ZIL to $0.155 or even $0.13.
Moreover, a bearish divergence between Zilliqa’s price and the Relative Strength Index has formed on the four-hour chart. While ZIL has been making a series of higher highs, the RSI has been trending downwards. Such market behavior is indicative of waning bullish momentum.
Despite the mounting sell signals building on Zilliqa’s four-hour chart, traders will be looking out for another bullish breakout. A decisive candlestick close above the recent high at $0.22 could have the strength to invalidate the short-term pessimistic outlook and lead to further gains. Breaching the critical resistance area could push ZIL toward $0.28 or higher.
Disclosure: At the time of writing, the author of this piece owned BTC and ETH.
For more key market trends, subscribe to our YouTube channel and get weekly updates from our lead bitcoin analyst Nathan Batchelor.