- Tezos price action flip-flopped on lower US inflation and investor enthusiasm.
- XTZ price is set to pop higher, but caution is still required.
- Expect to see a jump of 10%, as one FED member is signalling distress.
Tezos (XTZ) price is bouncing on the euphoria of Wednesday when US CPI dropped below estimates and came out lower-than-expected, which for once means good news. It suggests that households will see their living costs stabilising a bit after a steep decline lasting six months. Although this number is very supportive and has seen XTZ price rally 8% thus far, one Dovish Fed member said that the Bank is not done with raising rates at all and still needs to keep hiking them at an excruciating pace, which could spell trouble ahead for cryptocurrency traders if they do not watch out.
XTZ price rally to be handled with care
Tezos price is set to test and break above the monthly R1 resistance level at $1.96 despite already receiving a small rejection this morning. The level is becoming quite a hurdle for bulls, who were not able to break above it on August 8. The risk is that the R1 resistance could turn into a double top, capping price for the foreseeable future. Additionally, traders in any segment of the markets need to keep in mind the warnings that several Fed members issued afterward regarding what the Fed will do next.
XTZ price rallied on the back of downgraded rate hike expectations, with the next meeting in September only expected to yield a 50 bp rather than 75 bp rise. This opened the door for investors to jump on risk-on assets. Hours after the CPI print, however, a handful of Fed officials all came out in sync saying that the Fed is not done, with even a very dovish member repeating the same message. That counts as a big signal on the horizon that the rally in XTZ price might only reach $2.25 and then fall back once the Fed confirms it will still hike by 75bp – higher than current expectations.
XTZ/USD Daily chart
With this limited upside scenario in mind, a simple technical rejection has already been mentioned in the case of a double top forming against the monthly R1. In a bearish scenario, a fade could unfold, and – should price action break below the low of Wednesday – traders should expect to see a drop back to the monthly pivot in search of support. This might be found at around $1.64, or from the 55-day Simple Moving Average at $1.60.
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.
Recommended Content
Editors’ Picks
China coin narrative in play as Coinbase CEO warns of restrictive US crypto policies

Brian Armstrong, CEO and co-founder of cryptocurrency platform Coinbase, shared his thoughts on restrictive US crypto policies in an opinion editorial published by Market Watch on Tuesday.
Ethereum holders pull $1 billion in ETH off exchanges hinting retail-led rally

Ethereum holdings in exchange wallets declined by $1.04 billion between May 8 and May 31. Interestingly, while large wallet investors have shed their Ether holdings, the altcoin got redistributed to addresses with less than 1 ETH.
Dogecoin price action hints DOGE can reverse its bearish trend

Dogecoin (DOGE) price presents a potential for trend reversal provided a certain set of conditions are met. These conditions involve overcoming key hurdles for DOGE bulls and seeing momentum indicators flip bullish on lower time frames.
PEPE price to drop another 15% as altcoin winter is only halfway finished

PEPE price is feeling the frost and cold of the altcoin winter that continues with some notable slides in price valuation in the altcoin space. After price action dropped below $0.0014700, traders must have understood that a turnaround would only occur at a high supportive level.
Bitcoin: BTC delays inevitable crash to $25,000

Bitcoin price is delaying a crash that has been brewing for roughly two weeks. A failure to push higher could result in a steep correction next week. The troubling macroeconomic conditions could be key in catalyzing and trigger a nosedive for BTC holders.