- Tezos price is under siege from tail risks that got inflated overnight.
- XTZ price dropped almost 5% on the back of Coinbase earnings.
- Another leg lower could materialise on the back of US inflation print breaking investors’ sentiment.
Tezos (XTZ) price action is deteriorating quickly after the shortfall from Coinbase earnings printed overnight at the US closing bell. While some cryptocurrencies saw a slight recovery in the ASIA PAC session, XTZ price sees investors booking gains as a big tail risk, and technical rejection adds to bearish pressures that outweigh bulls. Expect a drop back towards $1.65-$1.60 in the best-case scenario or towards $1.20 at the low of 2022 should global markets perform a knee-jerk reaction and switch back to risk-off this afternoon.
XTZ traders could be in for a cold shower
Tezos price dropped roughly 5% in just two trading days as investors got rattled by the disappointing earnings from Coinbase overnight. Next on the docket this afternoon are the US inflation numbers which will be key for the rest of the week. With this tail risk at hand, investors do not look eager to stay in their XTZ long positions and are pulling out before the print. Should the CPI number be a small decline or another jump, expect to see massive dollar strength across the board with cryptocurrencies collapsing.
XTZ price has two scenarios on the table where losses can be limited towards $1.65 - $1.60, where the monthly pivot or the 55-day Simple Moving Average (SMA) will provide support and limit any losses to around 10%. The worst-case scenario would be a break below the 55-day SMA, which puts Tezos price action at risk of collapsing back towards $1.20, the low of June 18, 2022, and the low of 2022 overall. Traders would stand to lose 30% in that falling knife price action and see their efforts in this crypto summer being put back to square one.
XTZ/USD Daily chart
The best case would be that the rejection from Monday against the monthly R1 resistance level was just a fade. An additional catalyst could come as well from the US CPI numbers if there should be a downside surprise, indicating that the Fed could start slowing down their aggressive rate hike path, opening up the possibility of a goldilocks scenario and a dovish hiking cycle. More cash could then come in and see more buying action, with XTZ price quickly back at $1.95 and piercing through to head to $2.00.
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.
Follow us on Telegram
Stay updated of all the news
Ethereum price to outpace Bitcoin price as ETH jumps over key hurdle where BTC fumbles
Ethereum (ETH) price is working on its recovery after it dipped to a two-week low on Thursday. While Bitcoin price has failed to make a similar move and head back above $26,500, Ethereum is outpacing Bitcoin and has been able to push above $1,800.
Bitcoin price retreats as US core PCE inflation comes hotter than expected
Bitcoin price declined in response to April's US core PCE inflation data, which came higher than anticipated. The knee-jerk reaction from market participants increased the selling pressure on the asset, pushing it below $26,400.
Cardano founder says CIP-1694 upgrade will be a “wake-up call” for crypto
Cardano, one of Ethereum’s main competitors, is gearing up for further decentralization through its Improvement Proposal (CIP-1694), which is expected to bring the Ethereum-killer altcoin into a new era of governance with decentralization in its decision-making.
PEPE price action puts traders on the edge of their seats as pennant gets filled
PEPE price is entering the very last possible stage before finally determining whether bulls or bears have the winning hand in this poker game showdown.
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.