Zilliqa (ZIL): The Correction Is About to Gain Momentum
01 Aug 2020 #Zilliqa
Over the past three months, Zilliqa (ZIL) has inarguably been one of the most exciting altcoins to analyze and trade. The market collapse on Black Thursday sent the price of ZIL to the all-time low at $0.0024, which must have left only the most devoted and risk-tolerant traders in this market. However, those who armed themselves with patience were generously rewarded since the price of ZIL had literally skyrocketed in a span of some four weeks, having gone up by the enormous 737% at the top of the upper wick, and 535% at the close of the last green candlestick.
But that appears to have been the end of the fairytale for Zilliqa, which, by the way, was one of the hottest topics among traders recently, as it was brutally rejected by the bears at $0.03.
6-month ZIL price action chart
The chart above clearly shows that the uptrend has snapped at the indicated price level and dived head-first into the waters of correction. On the macro level, though, Zilliqa appears to have shown signs of life after nearly a year-long hibernation period.
ZIL historical price chart
However, it is way too soon to begin analyzing ZIL in the bullish context because even such a spectacular rocket launch on the part of buyers didn’t have a strong enough impulse to go past a crucial resistance at $0.003, which is basically the borderline between the bearish and bullish territories. Should the buyers be unable to hold their ground and not allow the price to fall below $0.015, we expect ZIL to crash by another 30% to 40% and end up at $0.001.
The bulls grapple with the bears above $0.015
The weekly chart below shows that ZIL was unable to establish a new higher high above $0.0025, which was last reached at the second upswing of the double top formation that preceded the last price dump and the subsequent consolidation at $0.05.
1-week ZIL/USDT chart
Instead, the price made what appears to be a lower high that is going to be confirmed unless the bulls manage to recover swiftly and launch a move above $0.025. But the probability of that is diminishing as most indicators have started switching to the bearish side.
- After being tremendously bullish for more than six months, which should have prepared traders for the latest pump, MACD seems to have reached the extremes, and its main line began to lean in the direction of the signal line. It could serve as an indication of a sizable pullback;
- The 14-period RSI is already traveling southward after visiting the overbought zone above 80. The indicator is determined to keep on declining, so traders should prepare themselves for more bearish price action;
- The Bollinger Bands start to shrink after being overextended during the bullish rally, so the price is likely to be pulled down to the middle line of BB or the support level at $0.01. The ATR indicator keeps going up, aiming for 0.004, signaling about the continuation of the period of high volatility, but this time around, the price action will be dictated by the sellers.
All in all, the amazing bullish rally on the part of ZIL has run its course, and now everything points to the continuation of correction that could find the bottom at $0.01.
