• Zilliqa price tagged the 2018 high this week.
  • Daily Relative Strength Index (RSI) shows bearish momentum divergence.
  • Deep range of support is just below current price.

Zilliqa price cleared the neckline of a massive head-and-shoulders bottom pattern in November 2020, resulting in a 630% rally at Monday’s high. This rally has captured support at the 50-day simple moving average (SMA) on every pullback over the last three months. However, all trends need a structural reset, and resistance at the all-time high will likely be the catalyst to initiate a deeper correction.

Zilliqa price correction will be cyclical, not secular 

The bearish momentum divergence on the daily charts combined with a head-and-shoulders top pattern on the weekly RSI should raise caution amongst ZIL traders, despite trading near all-time highs. A break below the weekly RSI neckline will be the first confirmation that the correction is gaining traction.

ZIL has a range of support between $0.166 and $0.105 that encompasses the 50 and 100-day SMAs. If the advance is to follow historical precedent, the digital token should discover heavy support at the 50-day SMA, currently at $0.153. It would represent an 18.5% decline from the current price. 

However, suppose ZIL is going to launch a successful rally above the all-time high at $0.235. In that case, price needs a deeper correction to hammer the RSI into an oversold condition, thereby generating a bull market reset. A fair target for a reset is the 100-day SMA at $0.117, producing a 38.5% decline from the current price.

ZIL/USD daily chart

ZIL/USD daily chart

Cryptocurrencies have a unique volatility profile, and as a result, traders need to respect the alternative scenario for any market projection. In this case, ZIL may print a marginal new high, or it may define a tight pennant pattern just under the 2018 high, much like the price action of Cardano (ADA) at the time of writing. 

Traders should evaluate upside targets after a weekly close above the all-time high at $0.235.

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.

Cryptos feed

Latest Crypto News


Latest Crypto News & Analysis

Editors’ Picks

Top 3 Price Prediction: BTC looking more bearish every day

The recovery of the cryptocurrency market from the late-March lows lifted the complex above the $2 trillion threshold, with Bitcoin still representing over 50% despite the lackluster price action. The rebound has been more bountiful for ETH bulls and exceptionally so for XRP speculators.

More Bitcoin News

Cardano Price Projection: ADA poised for a 270% upswing

Cardano price climbed 270% in February on the highest monthly volume total since the digital coin inception in 2017. The correction process through March and early April has formed a pennant continuation pattern that includes two weekly dojis.

More Cardano News

Litecoin Price Forecast: LTC targets $300 with only one key barrier to beat

Litecoin (LTC) has been trading in a 12-hour uptrend since March 25 but suffered a 12% correction in the past 24 hours as the entire crypto market plummeted. The digital asset is poised for yet another leg up according to several indicators and on-chain metrics.

More Litecoin News

Ripple Price Forecast: XRP faces massive profit-taking after 100% rally

The Ripple price had one of the craziest rallies in the past three days, jumping by 100% to a three-year high of $1.19. Despite the ongoing SEC lawsuit against Ripple, XRP holders have grown confident in the digital asset and managed to push it above ...

More Ripple News

BEST CRYPTO BROKERS/EXCHANGES




Bitcoin Weekly Forecast: BTC 2.0 gaining momentum, but price remains below all-time high

Bitcoin price with 440% returns over the last six months, 108% in Q1, and almost 30% this month reflect the evolution of BTC from a speculative asset to a means of payment and a store of value for individual and institutional investors.

Read the weekly forecast

BTC

ETH

XRP