Bull traders in Tezos do not seem to understand why ‘no’ means ‘no’

• Tezos price underwent a third firm rejection over the weekend.
• XTZ price set to trade back in search of support. 
• Expect to see a drop back towards pivotal levels near $1.64.

Tezos (XTZ) price action has undergone a firm rejection over the weekend and as stated in a previous article on FXStreet, in which we warned about the risk of bulls dropping the ball on this rally and price action falling another leg lower, more downside could be on the horizon. Indeed , that scenario is already unfolding rapidly, with price action having faded 8% and looking to lose another 8% towards the first area of support. With global markets deteriorating a bit, more downside potential is present as it becomes clear that XTZ bulls have handed over the keys to bears.

XTZ price sees bulls losing the ball to bears

Tezos price action awakes after a very messy weekend where bulls, although warned, went for the easy money and started booking profits on their summer rally earnings. With that sell wave, a big fade occurred which is currently printing an 8% decline against the monthly R1 resistance level. Another leg lower of 8% is still pending as price action will look for support around the monthly pivot at 1.64, underpinned by the 55-day Simple Moving Average (SMA) as a key level of support.

XTZ price could even be at risk of imploding 30% once it pierces through the 55-day SMA and the pivotal R1 resistance level. Another leg lower would face support around $1.42 with the monthly S2 support level, which does not hold that much relevance. XTZ price action will come into the orbit of being attracted by gravity from the lowest level of 2022 on June 18, bearing a 30% negative profit-and-loss for bulls.

XTZ/USD Daily chart

Seeing that the trading week already started with this setback and Tezos price action on the back foot, investors and traders could start to scoop up the altcoin to end the week on a positive note. That would mean that this time XTZ price action would test and finally break $1.96 to the upside and possibly the top, or break $2 as a psychologically important pivotal level. Traders who venture to stay in could see a return of roughly 25% as the next big level is near $2.20-$2.25 to the upside.