- Zilliqa has stuck in consolidation ahead of a possible move price levels above $0.1.
- A symmetrical triangle pattern breakout on the 4-hour chart could add credence to the bullish outlook.
- The reduction in the number of transactions on the network shows that recovery would be an uphill task.
Zilliqa has been in consolidation after correcting from the December 2020 high of $0.099. Despite the rally observed across the cryptocurrency market in January, ZIL remained relatively stable, especially after holding above $0.05. Meanwhile, the high transaction throughput token is dancing at $0.065 while looking forward to a potential breakout eyeing highs above $0.1.
Zilliqa draws nigh to a breakout
A comprehensive look at the 4-hour chart shows ZIL trading at the apex of a symmetrical triangle. This pattern highlights a period of consolidation that comes after a significant move like the one in December.
The asset's lower highs are connected by a trendline, whereas another links a series of higher lows. Symmetrical patterns can result in two scenarios: A breakout or breakdown.
A breakout often occurs when the price crosses above the upper trendline, signifying the start of an uptrend. On the other hand, a breakdown occurs when the asset's slides underneath the lower trendline highlight the beginning of a downtrend.
Notably, breakouts and breakdowns have exact targets measured between the highest and lowest triangle points. In this case, ZIL will confirm a breakout if it closes the day above the 50 Simple Moving Average. Massive buy orders will likely be triggered on trading above the triangle, pushing Zilliqa to higher levels, preferably past $0.1.
ZIL/USD 4-hour chart
Looking at the other side of the picture
Zilliqa's on-chain transactions topped out in October at nearly 1.2 million. The transactions remained relatively high toward the end of 2020. Amid the rally to $0.099 in December, the total monthly transaction stood at approximately 1.1 million.
Over the last four weeks, this figure has gone down significantly, which might explain the consolidation in the token's price—currently, the tractions in January average at roughly 872,000. If the transactions fail to recover, ZIL might take a long time to break out or even break down further.
Zilliqa monthly transactions
It is also worth mentioning that the symmetrical triangle can culminate in a breakdown, especially if Zilliqa closes the day under the 50 SMA. Support at $0.05 must also hold firmly to ensure that the potentially massive drop to $0.036 is averted altogether.
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