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Tezos: Is there a shorting opportunity on the cards as XTZ fails to defend $2 support

Disclaimer: The data offered doesn’t represent monetary, funding, buying and selling, or different sorts of recommendation and is solely the opinion of the author.

Tezos has been bearish on greater timeframes, and the crypto asset has misplaced 60% of its worth on the charts because the flip of the 12 months. Further losses cannot but be dominated out. In the previous few days, Bitcoin has been compelled to drop from the $32k highs however at press time it continued to carry on to the $29.6k mark.

Bitcoin may have a say within the route of Tezos on the worth charts within the subsequent few days, however as issues stand, the technical outlook was bearish for XTZ.

XTZ- 6 Hour Chart

Tezos shows a bearish market structure and a possible trade opportunity

Source: XTZ/USDT on TradingView

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On the H6 chart, it may be seen that XTZ has shaped a collection of decrease highs since April. In May, the worth appeared to seek out some help on the $2.41 help degree however was rapidly pushed beneath because the promoting stress mounted.

At the time of writing, the decrease excessive at $2.29 was the extent to beat for the market construction to be flipped to bearish. As issues stand, there have been some issues as the worth has damaged previous the $1.92 mark, however was additionally unable to climb previous the $2.29 degree.

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XTZ- 2 Hour Chart

Tezos shows a bearish market structure and a possible trade opportunity

Source: XTZ/USDT on TradingView

The H2 chart exhibits the difficult nature of the construction. In mid-May, the $1.93 degree (dotted white) was established because the decrease excessive of the downtrend of April and May, however XTZ was in a position to bounce from the $1.66 help degree and climb previous the $1.93 mark. In doing so, it set a better low at $1.85 (dotted cyan) and a better excessive ($2.26) and indicated a bullish construction within the shorter timeframe.

However, the bearish stress within the final week of May compelled XTZ beneath the $1.85 greater low and in addition compelled the worth to register a decrease excessive (dotted purple) at $2.2. The break of the previous greater low at $1.85 flipped the decrease timeframe construction again to bearish. A decrease low at $1.75 was additionally registered, and this growth was the explanation for a bearish outlook on the decrease timeframes as effectively.

Therefore, on the time of writing, the bias of each the upper and decrease timeframes aligns to be bearish. Moreover, the $2 space is each a psychological as effectively a technical zone of resistance. A retest of this space can present shorting alternatives.

Tezos shows a bearish market structure and a possible trade opportunity

Source: XTZ/USDT on TradingView

The H2 RSI was beneath impartial 50 however stood at 46 to indicate that the momentum was solely weakly bearish. The A/D indicator has been in a gradual downtrend in current weeks, which urged that the promoting stress has been regular and important.

The Stochastic RSI was additionally climbing towards the overbought territory.

Conclusion

If a retest of the $2 space arrives throughout the subsequent couple of days, alongside a Stochastic RSI bearish crossover and a substantial buying and selling quantity, a brief place could be thought of. Trading quantity has been decreased in current hours, which may be a results of the lighter buying and selling quantity on a weekend.

A brief place entered within the $1.93-$2 space can have a stop-loss set simply above the $2.05-$2.07 mark, and take-profit ranges at $1.75 and $1.66.

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