Zilliqa (ZIL) breaks the 700-day support line, what next?
Ziliqa (ZIL) has broken below the January 2021 low but is trading within a bullish pattern and is showing signs of a potential bullish reversal.
ZIL has been falling since hitting an all-time high of $0.257 on May 6th. The falling move led to a low of $0.033 on Feb. 24. That’s down 86% from the aforementioned all-time high.
Although three days remain until the end of the week, a clear uptrend is needed for the support line to remain intact.
ZIL is trading in a bullish pattern
Despite the ongoing decline, the daily chart shows that ZIL has been trading inside a descending wedge since September 2021. The wedge is considered a bullish pattern. Therefore, a break above it would be the most likely scenario.
The breakout was supported by significant bullish divergence in both the RSI and MACD.
In the case of the RSI, this happened after the indicator bounced off its lowest level since 2019 (green icon) on Jan. 24. Such pronounced bullish divergence often heralds a trend reversal.
If there is a breakout, the next resistance lies at $0.086. This is the 0.5 Fib retracement resistance and horizontal resistance area.
Trader @Thetradinghubb tweeted a chart of ZIL and said the correction could end near $0.03.
The most probable wave number indicates that ZIL is within wave C of the ABC correction (white). The number of partial waves is plotted in black.
So far wave A:C has a ratio of 1:0.5 and the following wave has evolved into an ending crossover. Such patterns are often followed by a clear move in the other direction.
This, combined with bullish divergences, suggests a breakout of the wedge is likely.
Disclaimer: This article is for informational purposes only, not investment advice. Investors should research carefully before making a decision. We are not responsible for your investment decisions
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