While the price of Bitcoin (BTC) has consolidated below USD 10,000, several altcoins have shown tremendous rallies such as Theta Token (THETA) and Zilliqa (ZIL).
Zilliqa, in particular, the cryptomone in the 40th position by market capitalization, has seen a 950% increase since the collapse in March, which justifies an analysis to determine if the monstrous rebound of Immediate Edge has ended or is just beginning.
Crypto market daily performance
Zilliqa rises to USD 0.02 after reaching a low of USD 0.0022 in March
After Zilliqa reached its cycle low of USD 0.0022, the cryptomone currency recovered massively to USD 0.02. That is a 950% increase and is one of the largest in recent times.
However, as the chart shows, the price of Zilliqa is currently within an area of resistance, where no further upward movement is expected.
Zilliqa (ZIL) outperforms Bitcoin with a 950% gain since March, what’s next?
ZIL USD 1-day chart
As shown in the chart, the price of Zilliqa is once again within a range structure. Resistances in this range are between the levels of USD 0.022 and USD 0.025, while support levels are at USD 0.012 and USD 0.014-0.015.
Does that mean you would make a market buy of the currency here, as it has worked well in recent periods? No, in trading, it is always useful to trace and analyze the price action of a particular asset before deciding to trade.
In the case of ZIL, the upside potential, in the short term, is less than a possible downward correction. So what levels should you be looking at?
Most likely, a corrective move towards USD 0.012-0.015 would not be uncommon and would provide a healthy and natural correction before a new upward momentum wave is ready to develop.
The potential scenario for observing a trend change
A probable scenario for a trend reversal can be classified through a bearish divergence structure as shown in the graph.
Usually an uptrend ends through indicator signals in which a downward divergence combined with an upward wedge (and usually against a resistance) is a significant signal for the downward momentum.
Therefore, to maintain the upward momentum, the price of Zilliqa must be held above USD 0.019. If that succeeds, another push towards the resistance zones at USD 0.023-0.025 is likely to occur.
Traders should be aware of a possible upper structure in this resistance area, in which a bearish divergence would be one of the signals. In that sense, the last push moves regularly without volume or a decrease in volume. It forms an upward wedge, which ends in a drop.
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What are the interesting areas to observe in the coming months? Support areas of around USD 0.012 and USD 0.014-0.016 should be observed for a possible ‚buy on the drop‘ opportunity. If Zilliqa breaks above USD 0.025, the next area of resistance is between USD 0.047-0.053.