• Chiliz price is building the right shoulder of a head-and-shoulders bottom pattern.
  • CHZ has rallied 39% over the last three days, carrying it to crucial moving average resistance.
  • Volume profile is complementary to the bottom pattern.

Chiliz price, similar to the other cryptocurrencies, suffered a massive decline of over 60% from April 16 to April 22. Surprisingly, CHZ managed to hold the 10-week simple moving average (SMA) on a closing basis, highlighting how extended the altcoin was from the mean. The bottoming process is taking the form of a head-and-shoulders bottom with substantial upside if constructed correctly.

Chiliz price idyllic scene does not hide dangerous games

A head-and-shoulders bottom pattern is a famous pattern, and outsiders often ridicule it, yet its profitability is high relative to other patterns. It is one of the more complex patterns because it is the union of trend lines, support or resistance lines, and rounding. The performance and success rate are relatively high, but only after completion.

In the head-and-shoulders bottom, both shoulders must be higher than the head but do not need to be the same height. Studies have shown that post-breakout performance is better if the right shoulder is slightly lower than the left shoulder. Other attributes include the peaks being more or less equidistant from each other. The volume is highest on the decline into and at the low of the left shoulder and should decline as the pattern develops.

At this point, CHZ is illustrating a constructive head-and-shoulders bottom based on the attributes categorized in the preceding paragraph. The only component missing is the right shoulder, but the intersection of the 50 twelve-hour SMA at $0.493 with the 100 twelve-hour SMA at $0.506 should provide the needed resistance to define the right shoulder. If symmetry is to be maintained, the right shoulder should develop over the next 3-5 days before breaking out.

The measured move target of the pattern is 76% from the neckline, indicating a price target of $0.921. The rally to the target will find some resistance at the key CHZ Fibonacci retracement levels of the April decline, but the topside trend line from the March high through the April high will offer the most significant challenge at $0.812.

Additional upside targets include the 138.2% extension of the April decline at $1.049 and then the 161.8% extension at $1.174.

CHZ/USD 12-hour chart

CHZ/USD 12-hour chart

The bearish alternative will take precedent if CHZ fails to hold the 61.8% retracement of the February-March advance at $0.392. It will signify that a more complex bottom is unfolding, including the potential for at least a test of the correction low at $0.318. The following support is the 78.6% retracement of the February-March advance at $0.233.

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Cryptos feed

Latest Crypto News

Latest Crypto News & Analysis

Editors’ Picks

SafeMoon looks to climb 20%

SafeMoon price shows a resurgence of bulls that have kept it from heading lower. Instead, SAFEMOON has ricocheted off the support level and might continue to rise if the buyers persist.

More SafeMoon News

Ethereum price prepares for a bullish weekend, targeting $3,000

Ethereum price seems prime to revisit $3,000. Although ETH faces resistance at $2,300, the upswing seems imminent. A downswing below $2,000 could invalidate the bullish thesis. 

More Ethereum News

VeChain forms potential bottom, eyes 30% upswing

VeChain price retraces to a stable demand level as investors book profits after a minor upswing. VET will face an uphill battle with multiple swing highs to take out. Therefore, investors can expect this rally to be a slow run-up.

More VeChain News

Bitcoin goes through range of emotions, from legal tender to Chinese miners exodus

Bitcoin price rallied wildly on the news of it becoming legal tender in El Salvador, but China’s clampdown on miners was equally palpable. BTC seems to be taking a breather before its uptrend resumes.

More Bitcoin News


Bitcoin Weekly Forecast: Markets revert to mean, but BTC price remains indecisive

Bitcoin price shows considerable strength after springing from the recent crashes. Still, it is uncertain whether the current bullish impulse will morph into a new uptrend or lead to a more profound decline.

Read the weekly forecast