Tezos Technical Analysis: XTZ recovery in the offing as market bottom draws nigh
|- Tezos is nearing a market bottom, which might catapult it to highs above $3.
- The immediate support for XTZ does not seem strong enough; hence it could attract more losses before a rebound.
Tezos appears to have slowed the extended downtrend after encountering support at $1.75. Sellers took over control of the price after the recovery from March lows hit a snag at $4.5 in August. At the moment, Tezos is teetering at $2 after growing by 1.5% in the last 214 hours. An anticipated bottom is likely to culminate in massive gains which currently eye levels past $3. The digital asset is ranked 19th and boasts of a market cap of $1.5 billion.
Tezos bulls look forward to $3
Recently, Tezos embraced support at $1.75 and made a shallow recovery that hit a wall at $2.25. The daily chart shows the token battling resistance at the 50 Simple Moving Average. Closing above the 50 SMA would call for more buy orders, elevating XTZ/USD to levels around the $2.75, as highlighted by the 100 SMA and 200 SMA.
XTZ/USD daily chart
The Bollinger bands applied to the same timeframe show that Tezos is in the middle of consolidation. Its immediate downside is supported by the middle boundary, giving credence to the bullish scenario. Price action past the upper curve of the indicator would elevate XTZ to highs above $3. Similarly, the Relative Strength Index insists on the consolidation ahead of an anticipated breakout.
XTZ/USD daily chart
It is essential to realize that Tezos is likely to fall some more before a formidable bottom emerges. For instance, the hourly chart shines a light on already building selling pressure under the 50 SMA. Besides, the immediate upside is capped by more barriers at $2.1, $2.15, and $2.2.
XTZ/USD 1-hour chart
Tezos must close above the 50 SMA to continue with the uptrend and avoid the potential drop. The most robust support lies between $1.8 and $1.85. However, the 100 SMA and the 200 SMA might absorb some of the selling pressure, cushioning the crypto from dire losses.
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