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Chukwuemeka Raphael
May 18, 2022

Tezos (XTZ) Price is Approaching the Oversold Region: What Next?

Tezos
Tezos is one of the unique blockchains in the cryptocurrency space. Its native token XTZ is presently trading at $1.81. Tezos is ranked in number 40th position in the CoinMarketCap ranking of cryptocurrencies in terms of their market capitalization.

Although Tezos blockchain supports the deployment of smart contracts and is open source, it does not support splitting into hard forks. This is one factor that makes it different from the Ethereum and Bitcoin blockchains.

At present, Tezos (XTZ) is approaching the oversold region as it has a relative strength index (RSI) value of 32.2. A relative Strength Index value between 0 and 30 means that the asset is in the undervalued or oversold region. Tezos is already approaching this region.

The following are possible at this stage:

Buyers have been on alert to see it touch a 30 RSI value

Once the relative strength index value of Tezos native token XTZ touches 30, more buyers might enter the market. This is because this value shows that buying XTZ at the present price or a price range between $1.74 and $1.80 is still good. This could reverse the present trend of XTZ where it has lost over 44.5%, 41.3%, and 56.5% in the past 30 days, 60 days, and 90 days respectively. The price could surge past $2 since the trading volume that is down by over 100% in the past 90 days after it moved from $131 million on Feb 17th to $61.5 million on May 16th will be increased.

Sellers involved in the panic sell

This would be a disaster for the token in various stages:

  • Its price could drop to around $1.79 and start reversing since it forms inverted head shoulders around that price. The price could then surge above $2.1.
  • The price of XTZ could further decrease to around $1.77 or $1.74 support levels. The price is expected to have a bullish reversal at either of the points due to the formation of a double bottom.
  • Conclusion

    However, there are two ways through which the recent decline in the price of XTZ could be reversed:

    • Increased baking activities: baking is a term used in the Tezos ecosystem where an investor stakes a minimum of 8000 XTZ so as to get involved in making governance decisions. This will reduce its volume in circulation thereby increasing the price.
    • Increased staking rewards: some of the two top exchanges that allow staking in XTZ are Binance and Coinbase. If the average percent yield in XTZ stake is increased, more holders could hodl for the long term. This will directly impact the price of Tezos positively.
    • Tezos (XTZ) Price is Approaching the Oversold Region: What Next?
      Chukwuemeka Raphael is an author and cryptocurrency news writer/analyst. As a Mathematics graduate and trained analyst, he combines his Math knowledge and strong reading culture in contributing content and analysis for the development of cryptocurrency and blockchain space.

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