Chiliz revisits a support zone, bulls can look to take profit at…
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.
- Chiliz revisits a bullish order block
- Buyers beware of a bearish Bitcoin
Chiliz has performed well in the month of September. The rally two weeks ago measured 60% from the lows to the swing high. Despite a 15% pullback over the past week, the longer-term outlook remained bullish for CHZ.
Yet, a drop below $0.22 would invalidate this idea. In a previous article, a bearish divergence was seen, and the selling pressure on Bitcoin forced a sharp pullback for Chiliz.
Chiliz at a bullish order block, but choppy waters ahead
The daily timeframe had a bullish structure. Therefore on the 12-hour chart, a bullish bias was warranted. The $0.18 area was an important support zone from which CHZ rallied to $0.28 earlier this month. In mid-August, the $0.24-$0.25 area had acted as resistance.
At the time of writing, the price had slipped below the $0.247 key level. However it was still within the bullish order block formed a few days ago. Hence, a buying opportunity of relatively higher risk was present.
To the upside, a move to the $0.28-$0.3 region could materialize in the next week or two. However, such a scenario could be heavily reliant on Bitcoin holding on to the $18.6k support. BTC climbing back above the $20k mark would aid CHZ sentiment as well.
Net inflow over the past two weeks- are derivatives the play?
In mid-September, a couple of days of heavy CHZ outflow was seen from the exchanges, according to data from CryptoQuant. This outflow suggested coins could have been sent to cold storage and a sign of investor accumulation. Yet, in the two weeks that followed, CHZ saw steady inflow into exchanges even as the price rallied to $0.28.
Overall the inflow in the past few days suggested that volatility could be around the corner. Bitcoin’s fall beneath $20k could be the beginning of a larger downward move. Fear of further losses could see market participants sending CHZ to exchanges for selling.
Invalidation of the bullish notion set forth would be a daily session close below the $0.22 mark. To the north, bulls can look to take profit at $0.28. The bias was bearish for Bitcoin, and BTC could drag CHZ lower over the next few days. Hence, caution was key.
