Tezos Price Forecast: XTZ downside eyes $1.8 before a significant reversal
|- Tezos is holding firmly to the immediate support provided by 50 SMA and the ascending triangle hypotenuse.
- A reversal to the primary support at $1.8 seems imminent, especially with the upside capped by the 200 SMA.
Tezos, like many other altcoins in the market, is having a difficult time catching with Bitcoin’s bullish cycle to a new yearly high at $16,500. Instead, XTZ struggles to defend short term support to focus on breaking the immediate resistance at $2.1. The cryptoasset was recently rejected at $2.2 for the second time in November, highlighting the intense pressure ahead.
Tezos on the verge of a substantial breakdown
The $1.5 billion digital asset is changing at $2.09 after losing a subtle 0.9% of its value in the last 24 hours. XTZ attracted a trading volume of $167 million in the same period. Marginally above the prevailing market value, the 200 Simple Moving Average caps price movements. More resistance is anticipated at $2.15 and $2.2.
Tezos is also trading within the confines of an ascending triangle. The pattern is formed by connecting a series of higher highs using a trendline and a horizontal line drawn along the swing highs. Usually, traders watch out for breakouts either to the downside or upside.
A typical ascending triangle pattern is interpreted as a continuation pattern because the price tends to break out in the same direction of the trend that existed before the triangle formed.
XTZ/USD 4-hour chart
As for Tezos, a breakdown is anticipated below the triangle if the short term resistance at the 200 SMA remains intact. The 50 SMA also provides immediate support alongside the ascending trendline. Price action on the downside might trigger declines to the 100 SMA at $2. Continued breakdown may see XTZ/USD retest the primary support at $1.8.
The hourly chart validates the downward momentum after shinning a light on the immense support ahead of XTZ, mainly created by the 100 SMA and the 50 SMA. A building bearish momentum eyes the immediate support formed by the 200 SMA. Overshooting this short term support could trigger losses under $2. The downward slope of the Relative Strength Index gives credence to the bearish outlook.
XTZ/USD hourly chart
The bearish narrative will be jeopardized if XTZ/USD closes the day above the 200 SMA. On the downside, the triangle support in conjunction with the 50 SMA must also hold. On the upside, trading above the next resistance at $2.15 could call for more buy orders, generating enough volume for a breakout above the x-axis.
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