The XTZ price surge, which was fueled in part by Tezos’ foray into the NFT arena, has resulted in a textbook bearish structure.
The Tezos (XTZ) market’s current price surge is at risk of exhaustion, as it generates a classic bearish pattern.
When the price oscillates between two upward but diverging trendlines, the pattern is known as the “ascending broadening wedge.” These wedges, according to their author Thomas Bulkowski, indicate less purchasing tiredness and more sellers’ desire to gain power, i.e., buyers tend to lose supremacy once the price crosses the top trendline.
The rising broadening wedge has formed as a result of XTZ’s 250 percent+ price rebound from its July 2021 bottom of $2.08. On Monday, the cryptocurrency challenged the upper trendline of the structure as resistance (about $7.5) with the hopes of extending its rally towards its previous high of $8.76.
But the price corrected, confirming strong selling sentiment near the wedge resistance. It now risks enlarging its correction towards the lower wedge trendline (near $5), based on similar pullback moves spotted since July 2021.
As a general rule with ascending broadening wedge patterns, the price should eventually break below the structure’s lower trendline and target the lowest point, i.e., around $2.38 in Tezos’s case.
Central charts note that almost 80% of ascending broadening wedge exits are bearish. Meanwhile, the price falls towards the bearish target six out of ten times.
Despite grappling with an eerie technical setup, Cardano (ADA) expects to retain its bullish bias based on Cardano’s proof-of-stake blockchain adoption.
Recently, American songwriter, rapper, and singer Doja Cat launched her nonfungible token (NFT) collection on OneOf, a digital art collectible marketplace running atop the Tezos blockchain. Her announcement coincided with a 42.65% upside move for ADA/USD during the September 9 and 10 trading session.
NFTs have been one of the most popular deals this year, with OneOf’s main competitor OpenSea reporting $3.4 billion in volume in August.
Meanwhile, the majority of NFT applications are hosted on Ethereum, but high transaction costs have become a source of concern. As a result, Ethereum’s cheaper alternatives have been chosen by many new NFT projects.
Solana’s native asset SOL, for example, has increased by 825 percent since its July 20 low, owing to the success of Degenerate Ape Academy, an NFT project, and Sam Bankman-crypto Fried’s exchange FTX’s decision to integrate Solana on their NFT platform.
In the last seven days, a similar mania aided in driving up demand for XTZ tokens.
Crypto Finance Group, InCore Bank, and Inacta, all based in Europe, gave Tezos a boost last month. The companies declared that they would issue their native tokens using Tezos’ DAR-1 token standard.
InCore has announced plans to build XTZ, an institutional-grade storage, staking, and trading service, raising the possibility that affluent investors will wish to participate in Tezos in the near future.