Tezos extends the weekend price action above $4.00 to test the resistance at $4.40.
A reversal is underway mainly impacted by the formation of a short term rising wedge pattern.
Some altcoins have been performing incredibly well over the last several weeks. The tokens have seen investors diversify their attention from Bitcoin to these smaller coins. This was reflected on Sunday when Chainlink attracted more volume on Coinbase than BTC.
Tezos price action has been very impressive over the last few days. The weekend session was characterized by stability above the support at $3.00. The attempts to correct higher yielded massively for XTZ with buyers flocking to take advantage of the upward move. Several barriers were shattered including $3.40, $3.80, and $4.00.
XTZ/USD soared to new monthly highs at $4.40 before starting the ongoing retreat. At the time of writing, XTX/USD is trading at $4.15. A couple of bearish candles have been printed with the price extending below a rising wedge pattern.
XTZ/USD 15’ chart
Wedge patterns are particularly important patterns in determining price reversals. For instance, a rising wedge pattern (similar to the one on the XTZ/USD chart) signals a reversal from a continuous uptrend. Traders must however utilize this pattern in relation to other indicators such as the RSI, the MACD and the volume indicator.
In this case, the RSI confirms the downtrend with a sharp retreat currently retesting the midline. Continued action under the midline would signal a strengthening bearish grip. The same downtrend is reinforced by the MACD as it spirals towards the mean line. A slide into the negative region will emphasize the increasing influence of the bulls over the price. Amid the declines, support is expected at $4.00 (50 SMA), the 100 SMA ($3.84), $3.60 and $3.40.
Luke has had a long interest in financial technology, especially cryptocurrency and blockchain. With a Bachelors degree in Journalism and Media, Luke is dedicating his writing skills for the digital currency sphere.He can be contacted at email@example.com