The XTZ-to-dollar exchange rate corrected downwards by more than 9 percent after logging four consecutive bullish sessions.
It is now eyeing a deeper pullback but could resume its uptrend owing to macro cryptocurrency market narrative.
Tezos (XTZ) was going to establish a historic high against the world’s leading cryptocurrency Bitcoin. But bears spoiled its winning streak.
The XTZ-to-BTC exchange rate corrected lower by more than 9 percent after hitting 3,796 sats on Sunday. The move downhill brought the price down to 3,383 sats ahead of the New York market open Monday, suggesting that traders are profit-taking from its latest gains, as shown in the chart below.
XTZBTC looking to extend its bearish correction | Source: Michaël van de Poppe
Earlier today, famous crypto trader Michaël van de Poppe noted that XTZ has more room to fall. The Amsterdam-based analyst predicted the Tezos token to extend its downside move into the 3275-3300 territory, adding that traders could use the area to refill their long positions and continue the XTZ/BTC’s current bull run.
“If I’d be looking for longs, I’d be looking at them in these zones,” explained Mr. Poppe. “[We] might bounce between 3375-3410 satoshis, but generally looking for 3275-3300 satoshis for a bounce.”
Toppling Bitcoin
After plunging about 40 percent to its 20202 low near 2411, Tezos rebounded wildly to reclaim a huge part of its loss. By April 26, the cryptocurrency had recovered about 57 percent of its Q1 plunge, apprehensively establishing its bull market in bitcoin-enabled trading rooms.
But gains in XTZ/BTC exchange rates followed a sharp and similar recovery in the bitcoin markets. The top cryptocurrency in March caught traders off guard after falling $7,200 to a 10-month low of $5,678 in only 15 minutes. The price later landed below the $4,000 level, followed by a pullback that took it above $7,800 as on April 27.
Tezos and other alternative tokens merely tailed bitcoin’s rebound to mark their respective recoveries.
Nevertheless, the blockchain project’s market capitalization ballooned additionally owing to a string of uplifting updates. It entered new partnerships with the Digital Transfer Agent platform Vertalo and trading system tZero. Moreover, Ethereum developer announced that it would enable developers to create and launch apps on the Tezos blockchain.
As a result, Tezos’ YTD gains surpassed that of bitcoin. The token surged 92 percent in the dollar-enabled market, while bitcoin was up by just 6.91 percent.
What’s Next for Tezos?
Tezos’ latest pullback shifted its technical support to 3275-3300, as Mr. Poppe suggested. But the cryptocurrency, in a medium-term outlook, could extend its bearish move towards the Ascending Trendline support in the chart below.
Support levels ahead | Source: TradingView.com, Binance
It is possible for Tezos to fall until it hits the level, only to rebound later and continue trending upwards. The worst-case scenario is XTZ breaking below the purpled trendline and shift its pullback target to 1,979 sats. But overall, it could sustain its bullish bias for 2020 based on available technical parameters.
Photo by Joanna Nix on Unsplash
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