Zilliqa Primed for Profit-Taking Following 46% Breakout
Key Takeaways
Zilliqa has surged by more than 46% over the past 24 hours.
The asset’s trading history suggests that a retracement could be underway.
ZIL would likely have to slice through resistance at $0.11 to gather enough momentum to advance further.
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Zilliqa has outperformed the rest of the crypto market over the last 24 hours. Still, the Layer 1 token may have entered overbought territory after encountering stiff resistance.
Zilliqa Meets Resistance
Zilliqa is facing a critical resistance barrier that could determine where it will head next.
The Layer 1 network’s ZIL token has surged by more than 46% over the past 24 hours, rising from a low of $0.067 to a high of $0.098. However, the significant gains incurred appear to have put Zilliqa in overbought territory. ZIL has reached a vital supply zone that may prevent it from advancing further.
On its 12-hour chart, Zilliqa appears to have been developing a descending parallel channel since early April. Every time ZIL has risen to the pattern’s upper trendline, it has been rejected and retraced toward the middle or lower trendline. From this point, the token has rebounded, as is often the case with such channels.
Zilliqa’s recent spike in volatility came after the token bounced off the channel’s lower edge. A rejection could occur now that it has reached the pattern’s upper boundary. A sustained 12-hour candlestick close below the $0.087 support level could confirm the pessimistic outlook.
Under such circumstances, ZIL could dip and search for support around the channel’s middle trendline at $0.067 or even the lower trendline at $0.048.
Still, Zilliqa could potentially invalidate the pessimistic outlook if it can print a 12-hour candlestick close above $0.11. Breaching this vital resistance level could give ZIL the strength to break out of its descending channel and target $0.14.
Disclosure: At the time of writing, the author of this piece owned BTC and ETH.
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