Tezos looks lively for a rally extension after flipping a 4-month long resistance trendline to support. Bullish on-chain metrics coupled with favorable indicators could see XTZ challenge some key swing highs this week, on course to the $6-mark. At the time of writing, XTZ traded at $4.5, up by 8% over the last 24 hours.
Tezos 4-hour time frame
Since discovering a demand zone between $2.54-$2.74, XTZ has come a long way. A violent uptrend saw XTZ flip a supply zone between $3.88-$3.77 and overturn an active resistance trendline to bullish. As a result, the price was trading at a 77% premium when compared to its 24 January low.
The buying fever was evident on the daily Awesome Oscillator. The momentum oscillator registered a line of green bars above equilibrium for the first time since early October. Furthermore, data from LunarCrash revealed that XTZ’s weekly social dominance was up by 10% amidst a chain of developments that were received positively amongst investors.
With the uptrend now in place, XTZ would challenge 5 January’s swing high at $5.37 before setting up a comeback to $6.1. The anticipated move accounted for another 35% surge from XTZ’s press-time level.
However, a near-term correction was anticipated before the next leg upwards. The daily RSI was close to overbought levels and the same could warrant a correction once XTZ tags its 200-SMA (green) around $4.8. A buying opportunity would even come to light should losses extend till a newly flipped support zone between $3.88-$3.77.
Conclusion
XTZ was favored for another 35% jump this week as its rally continues to shave off resistance areas on the chart. While some might even say that XTZ is mirroring its July-October 335% bull run, it’s difficult to make an accurate call at this stage. However, a bullish Bitcoin going forward would certainly back such arguments on XTZ.