- Tezos price withstands US Dollar strength this Tuesday morning as the currency rallies.
- XTZ stays flat and finds support as traders are done taking profit.
- Expect to see some pre-positioning toward a weaker US Dollar and more upside.
Tezos (XTZ) price had a gut-punch move on Monday with price action sliding over 8% as equities sold off in the US trading session. Overall, this morning the sell-off looks to be halted, which labels the drop-off on Monday as pure profit-taking in the wake of central bankers coming out with announcements by Wednesday. Expect some pre-positioning with bulls looking for bargains and scooping up some price action at the lows this week.
Tezos price sees bargain hunters scalping
Tezos price was no different from other asset classes as this week is set to kick off very violently on data, and central bank messages are kicking in. Traders were caught off guard on Monday morning with Spanish inflation rising surprisingly, and this morning French inflation jumped higher as well. This means that the European Central Bank will need to step up its rate hikes and even hike more. Traders are choosing money for their eggs and taking profit on their risk assets as some fear is creeping into the market that the Fed will stick to its same hiking pattern should they see inflation jump higher.
XTZ currently finds a floor around $1.05 and sees some bidding coming in as scalpers and bulls are looking to pre-position on the back of the trade idea that the Fed will deliver only a 25-basis-point hike and will fall in line with the expectations of markets. Expect more bids to come in by Wednesday as the market and liquidity will dry up near the US rate decision later on Wednesday. Expectations are that it will fall in line, and a break above $1.19 looks granted with the next price of $1.40 on the docket as a profit-taking level.
XTZ/USD daily chart
Some risk needs to be factored in, in case the Fed either hikes again by 50 basis points or does a 25-basis-point hike but instead delivers a very bearish message that points to more future hikes. That would mean that the market is wrong in its point of view and needs repricing. That then means that repricing will push risk assets lower, and XTZ will flirt with a break below $1 toward $0.90.
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