Tezos Price Analysis: XTZ breaks through support targeting $3

Tezos has recently been elevated to a new all-time high of $5.6. The significant milestone came after a persistent push from the bulls over the last couple of weeks. However, widespread selling pressure in the cryptocurrency market cut short the rally.

Tezos hunts for support to secure the uptrend

XTZ is trading at $4.1 at the time of writing. The freefall from the record high has been sharp and quick. Tentative support at $4.5 did little to absorb the selling pressure, adding credibility to the ongoing breakdown.

Marginally under the prevailing price level, the 50 Simple Moving Average (SMA) provides immediate support. Tezos bulls are banking on this area to stop the losses and resume the uptrend. However, if the bears slice through, we can expect XTZ to drop toward $3.

Notably, the 100 SMA currently at $3.6 and the 200 SMA at $3.2 will ensure that Tezos does not drop sharply and massively. For now, the least resistance path is downwards based on the Relative Strength Index (RSI) on the 4-hour chart.

XTZ/USD 4-hour chart

Santiment highlights a spike in social volume related to Tezos. The model has been designed to track cryptocurrency mentions across hundreds of social channels, including Twitter and Telegram. A surge in the volume is regarded as a bearish signal and often results in a correction.

For instance, after XTZ hit new all-time highs, its related social media mentions shot up significantly, but a price reversal occurred almost immediately. However, this model does not say how far the breakdown can go.

Tezos social volume

Looking at the other side of the fence

The 50 SMA support on the 4-hour chart remains intact for Tezos to resume the uptrend. Moreover, bulls must focus on lifting the token’s value above $0.45 to ensure that further losses are averted.