Tezos XTZ price has not deviated from the general dislocation in the altcoin space, shaping a similar symmetrical triangle pattern below the strategically important 200-day simple moving average. The technical continuation pattern formed following the 70% crash from the May 7 high price of $8.41 to the May 23 low of $2.42.
Today, Tezos XTZ's price structure is inconsistent with a bullish outlook as it struggles to hold the triangle’s lower trend line level while recording failed attempts to overcome the 200-day SMA in May and June. In addition, XTZ price has not shown any relative strength that is consistent with emerging leadership cryptocurrencies, such as Polygon MATIC.
The downside may be limited for Tezos XTZ price due to the closeness to the May 23 low. Still, a daily close below the lower trend line level will be the first necessary confirmation of XTZ's intentions to revisit the correction low price of $2.42. A secondary confirmation would be a daily close below the June 12 low of $2.92.
The 2019 rising trend line level at $2.49 does offer some friction against the successful sweep of the May 23 low, but in December 2020, Tezos XTZ price did briefly drop below the trend line before rebounding.
A decline to the May 23 low from the current XTZ price would equate to a 30% loss for stubborn investors.
It is difficult to recommend a long-term trade until Tezos price has cleared the 200-day SMA at a price of $3.90 and the triangle’s upper trend line level at $3.97 on a daily closing basis.
The McLaren news is a positive development, but it does not cancel the fact that Tezos XTZ price has logged the same path as most altcoins since the steep May price correction, reflecting an increased level of risk aversion that was not present in the first five months of 2021. So, for now, potential Tezos XTZ investors should embrace the patience to let the digital asset assert itself on the charts with conviction above or below the crucial levels already mentioned.
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