Tezos at a Make-Or-Break Point in Its Bullish Market Cycle

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The Tezos price has increased by 165% since the beginning of November. It is currently trading inside an area of resistance and is likely close to reaching a top.

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When MATIC, a Binance IEO plummeted by 70% in just a matter of hours earlier this week, many expected Tezos (XTZ) to do the same. While the price initially began to decrease, it quickly reversed and recouped most of its losses. This increase could have been aided by the launch of Tezos Brazil.

Crypto trader @thecryptocactus stated that Tezos is at a crossroads. If it moves above the current resistance line, we could see a continued move to the upside. If it fails, the price could sink back to new lows.

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Let’s analyze both possibilities and see which scenario is more likely.

Those more interested in a visual analysis can check out our YouTube video on the subject below:

Possible Bottom

If we exclude the highs reached on its opening week, the Tezos price reached a high of 79,000 satoshis in June 2018 and has been decreasing since. In June 2019, it reached an all-time low of 7,992 satoshis.

The main support area for Tezos is found at 9,500 satoshis, which was its lowest point before the current upward move that began in November which caused the price to increase by 165%.

On the other hand, the price is trading inside the resistance area at 23,500 satoshis. There is another resistance area around 27,000 satoshis. A movement above this range would likely invalidate a retracement and mean the beginning of a new market cycle.

The upward move that began in November was preceded by a yearlong bullish divergence in both the weekly MACD and RSI. Divergence in such high time-frames often suggests that a long-term reversal should ensue.

Elliott Formation

The Tezos price seems to be in the process of completing a five-wave Elliott formation. It is currently finishing the fifth wave, after which an A-B-C retracement is very common.

While the RSI has generated bearish divergence, the MACD has not, suggesting that the move might still continue. While predicting the exact top would only be speculating, the most likely areas would be the current resistance area of 23,500 or the next at 27,000 satoshis.

Future Movement

In order to predict future movement, there is a pattern that must be isolated.

Bullish divergence in the RSI precedes the upward trend. The upward market cycle does not end until the trend of the RSI is broken. This is what transpired during the 2018 bull market.

In the current movement, the slope of the RSI’s support line is very gradual. Therefore, as long as it stays intact, we can assume the upward move will continue.

For the target of this market cycle, we can use the 270% rate of increase of the 2018 movement, to predict a target of 35,000 satoshis.

In this scenario, the five-wave Elliott formation was the (1) wave in a larger five-wave formation, of which the fifth wave should end near 35,000.

To conclude, the Tezos price has likely begun a new bullish market cycle. It is possible that in the process of completing the fifth and final wave of a five-wave Elliott formation. Afterward, a corrective period is to be expected.

Disclaimer

All the information contained on our website is published in good faith and for general information purposes only. Any action the reader takes upon the information found on our website is strictly at their own risk.
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Valdrin discovered cryptocurrencies while he was getting his MSc in Financial Markets from the Barcelona graduate school of Economics. Shortly after graduating, he began writing for several different cryptocurrency related websites as a freelancer before eventually taking on the role of BeInCrypto's Senior Analyst.

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