The Chiliz price has so far avoided much of the losses suffered in the crypto market this month. However, it may be time for CHZ to play catch down.
Chiliz is last trading at $0.2588, down $0.0260 (-9.8%).
Whilst most of the market was struggling earlier in June, Chiliz, the sports fans’ favorite token, managed to add 81% between the 8th and 16th of the month.
Even the platforms’ backing by major sporting brands including FC Barcelona, Juventus and, Manchester City is no defense against the wave of negativity engulfing the cryptocurrency market.
Subsequently, the Chiliz price has been dragged south following the abysmal performance of Bitcoin and Ethereum over the last week.
CHZ is approaching the 200-day moving average at $0.2404 and If Chiliz fails to close above this critical support, it would be the first time during this year’s uptrend and hand the bulls a damaging red card.
The daily chart highlights that Chiliz has traded sideways to positive since the May 19th low at $0.1630. This has resulted in the formation of a bear flag consolidation phase.
Of note, on the 16th of June, CHZ pierced the resistance of the 50-day moving average at $0.3630. Coincidentally, this was also the top end of the bear flag. The resulting failure marked the start of a reversal for CHZ, and Chiliz has lost 30% in the 5 days following.
The real danger for longs is a close that penetrates the 200 DMA. In this instance, I would expect the price to succumb to liquidation and extend lower to the $0.1630 low from May 19th.
This should be considered a critical support level. Reinforced by the resulting bounce from $0.1640 4 days later, on the 23rd.
A daily settlement below this level should be viewed as potentially disastrous and would signify a return to the 19th of February high $0.7060 is achievable.
That being said, I am basing this negative outlook on a continuation of weakness in the crypto space. This is not the first time Bitcoin has been faced with $30,000 before bouncing. Therefore, Chiliz may well hold. A close above the 50-day moving average would signify some strength is returning and invalidate the bearish view.
However, it is the first time Bitcoin has faced $30,000, and a federal reserve prepared to embark on a tightening cycle much earlier than priced. I am hopeful about Chiliz’s long-term prospects but realistic about the short-term.
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