The price of Tezos (XTZ) recently broke through a 230-day resistance trendline, resulting in a 13% increase in a single day. This unexpected breakout has garnered significant market attention and raised questions about its underlying causes and potential implications.
Tezos had been trading under a descending resistance trendline since February, leading to a low of $0.62 in August. After bouncing off this low and consolidating above the $0.64 horizontal support area for an extended period, Tezos finally broke out on October 10.
While the price has moved above the resistance trendline, it has yet to close daily above it, and the trendline had been in place for 230 days.
One notable aspect of this breakout is the substantial increase in trading volume, which is the highest observed since September 2021, when Tezos approached its all-time high. Such a surge in volume often indicates significant trading activity, potentially driven by a large trader or “whale.”
Tezos (XTZ) Witnesses Impressive 13% Price Surge Amid Breakout
The daily Relative Strength Index (RSI) supports the continuation of the price increase, with readings above 50 indicating a bullish trend. Additionally, a bullish divergence in the RSI occurred before the rally, which is a potential sign of a trend reversal.
If the price continues to rise, Tezos could potentially increase by 25% and reach the next resistance level at $0.90. However, failure to close above the descending resistance trendline may lead to a 10% drop to the nearest support at $0.65.
Overall, the recent breakout in Tezos has generated significant interest, but traders remain cautious about the sustainability of this rally and are exploring potential short-selling opportunities.