Hi traders and welcome to another Tezos (XTZ) analysis I want to congratulate all bullish traders for gains on Tezos, and reason why it may be time to take profit for a while.
Starting from the October 2019 low and $0.74, Tezos seems to be completing its Wyckoffian Phase D, where markets begin the new uptrend after a significant low. As we can see, tezos made great progress toward the August 2019 high of 1.70.
What makes me cautious at this point, is the market’s behavior at this price level back in August. The distribution trading range (TR) that formed (the Blue B on the chart), consisted of an abrupt 20% initial drop from the high and pushed the market back in the trading range.
While it seems like this time there is much less supply by comparing volume signatures at the time, and the fact that we’ve closed above the highest high since the trading range began, are heavily bullish factors, this might be a short-term turning point for Tezos.
So let’s further analyze this hypothesis.
Using Elliott Wave we can see that Tezos has made an ABC correction to the Jan – May rally. This drop was down to approximately 0.236 FIB level, which Elliott suggests is a common level for wave 2 pullbacks.
On the 4 hour chart, we can also detect an impulse wave from the wave C low. So this new impulse could be Wave 1 of III. Ok so the first point of caution here: Wave 2s are usually deep pullbacks to the 0.236 level. So the price could go all the way back to the bottom of the TR around wave 2 or meet the wave 4 TR again.
The BTC cross is another point that makes me cautious. On the Wyckoff side, we can see the cyclicality of the market which corresponds with the Elliott Wave structures, as noted on the chart. We can see that the cross may have finished a 5 wave impulse and is due for an ABC correction. So there should be an alternate way to look at the USD cross:
This is where the ALT B comes into play. We can also see a 3 -3 -5 structure, which could be a complex wave B of the primary ABC correction of the Jan – May rally. Now in this scenario, keeping in mind the principle of alternation in Elliott method, wave C should consist of sharp drops, since wave A was contained and took about 45 days. So maybe, like last year, we’ll see one last drop in Tezos, before a Santa Rally. (I actually predict that’s what’s going to happen to BTC but that’s a story for another time)
Thanks for your time traders, e sure to leave your ideas about my analysis and like the post!
@ShayanRastgou, if it drops under $1.00, I am backing up the truck just for the staking rewards alone. So there is a part of me that wants that to happen even-though I am modestly invested already in Tezos.
trashpanda19
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@trashpanda19, Based on the chart on larger time scale, it seems like it is forming a massive W bottom. Do you think there is more upside to this regardless of how the market moves overall?
ShayanRastgou
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@trashpanda19, Honestly the upside with the current EW analysis looks really good. Looks like the price has made a good jump from the resistance right now. Let's see if it breaks below or continues higher. I think the upside should be discussed when this downturn shows it's done and where it actually ends
ShayanRastgou
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@trashpanda19, Stay tuned I'll post updates as price progresses
trashpanda19
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@ShayanRastgou, couldn't agree more, the 6 month chart shows a very accurate picture of all the support lines.
automaticprofits
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Hello. Do you think the ABC correction can take XTZ all the way back to .80 cents support area? Thanks.