Is Tezos Done Correcting After Its Massive Upward Move? [Premium Analysis]

The correction began on December 13, when the XTZ price reached a high of 2550 satoshis. The price has decreased by nearly 30 percent since. Cryptocurrency analyst and trader @imBagsy gave an update for the Tezos price. He tweeted that the price is very close to reaching the 1700 satoshis support area, which is the 0.5 Fib level of the entire upward move. Once it gets there, he predicts an upward bounce.

$XTZ update:

Target acquired, now bounce. pic.twitter.com/SWrx7NF7lG

— Bagsy (@imBagsy) December 30, 2019

Will this price level initiate a reversal? If so, how long will the price increase? Continue reading below if you want to find out the answer to these questions.

Corrective Period for Tezos

The XTZ price had been increasing since reaching a low of on October 27. The price doubled its value on December 13, after 47 days. Since then, XTZ has been decreasing. We suggested that this might be the top in our previous article from two weeks ago. The price fell below the 0.236 and 0.382 Fib levels without experiencing any type of upward bounce. This also caused it to decrease below the 50-day moving average (MA) and move towards the 0.5 Fib level. If this area does not hold, the strongest support area is found at 1450 satoshis, a combination of previous support, Fib levels, and the 100-day MA.

Elliott Formation

The Tezos price movement since the October 17 low has many characteristics of a five-wave Elliott formation. It seems as if we have completed the upward portion of the movement, after which an A-B-C corrective move follows. We are currently nearing the end of the A-wave, which is succeeded by a relief rally (B) and another move downward which would make a lower low. The volume pattern resembles that of an Elliott formation, especially the lower volume created during the final high. The entire upward move lasted for 47 days. If the corrective period takes the same amount of time, it will be completed near the end of January. Additionally, there is a previous pattern that supports the creation of a lower low. In April 2019, the XTZ price reached a similar high near 2600 satoshis, which was combined with a significant bearish divergence in the daily RSI. Afterward, the price completed an A-B-C correction. Similarly, the current movement generated bearish divergence once the price reached the 2600 satoshi resistance. The likeliest place for the C-wave to end would be at 1400 satoshis. Once the price gets there, the presence of reversal signs will indicate whether the price makes another attempt at reaching the resistance, or it continues decreasing as it did in June. To conclude, the XTZ price is in its corrective period. We expect a relief rally above 2000 satoshis followed by another downward move that could end near 1400 satoshis at the end of January 2020.