Zilliqa price in the turbulence zone after ZIL got rejected by heavy resistance

Zilliqa price has released the overbought condition after flashing a bearish momentum divergence on the daily and weekly Relative Strength Indexes (RSI). Upside potential may be limited in the short term due to the convergence of resistance levels and the lack of a buying stampede today.

Zilliqa price may be ready for a successful breakout above 2018 high

ZIL is not as highly followed as other cryptocurrencies. Still, there are recent rumors from the Xcademy Network Community Manager, Domen T., about another decentralized exchange (DEX) being launched on the Zilliqa platform.

It follows the first DEX introduced late in 2020, called ZilSwap, which had the goal of catapulting Zilliqa into the world of decentralized finance (DeFi). ZilSwap permits owners of Zilliqa-based digital assets to trade by utilizing an automated market maker and a permissionless liquidity protocol.

The launch of the second DEX is anticipated to be soon, and the platform will be similar to Pancake Swap. Domen T. did not get into further details about the DEX. Nevertheless, it should better position ZIL to compete in the rapidly growing DeFi space.

ZIL currently trades 45% below the 2018 high at $0.235 and just struck a significant resistance barrier framed by the upper edge of price congestion going back to late 2020 at $0.166 and the 10-week (SMA) at $0.167. 

To recapture 2018 high and the all-time set earlier in the month at $0.257, ZIL needs more robust volume to overcome the $0.166-$0.167 range. If buyers finally capitulate and jump on the rally, they will meet some resistance at the 50-day SMA at $0.180, but it should be a relatively easy path to the $0.235.

The question then becomes whether the April correction was sufficient to reset Zilliqa price for a sustainable advance above $0.257. For now, price projections are contained to the all-time high.

The Graph daily chart

Maybe the rumors of a second DEX prove unfounded, and ZIL reverts to the downside. The first necessary support is the 100-day SMA at $0.139, followed by the lower edge of the price congestion at $0.105. An extended wave of selling would find support at the 23.6% Fibonacci retracement of the rally since the March 2020 low at $0.084 and finally the February 23 low at $0.080.  

It is still too early to call, but speculators need to be open to a scenario where Zilliqa price forms the right shoulder of a head-and-shoulders top over the coming days/weeks.