NEW DELHI (CoinChapter.com) — Chiliz (CHZ), sports entertainment platform Socios’ native token, has made massive gains over the past few days.
The token rallied nearly 37% between Sept 16’s low ($0.19) and Sept 20’s intraday high ($0.26). Moreover, the rally helped Chiliz prices invalidate a bearish technical setup called the descending triangle setup.
In detail, a descending trendline connecting swing highs and a horizontal trendline joining swing lows form the pattern. The height of the triangle’s thickest section determines the price target in a descending triangle setup.
If Chiliz had completed the pattern, CHZ prices would have dropped 29% to $0.13 from the breakout level (base of the descending triangle) of $0.183.
However, Chiliz prices invalidated the setup, likely due to an announcement from founder Alexandre Dreyfus that the blockchain platform planned to switch to its native chain, CHZ 2.0. In a tweet, Dreyfus highlighted that Chiliz would decrease its reliance on Ethereum for launching its NFTs.
“We don’t have to rely forever only on ERC20 or ERC721 equivalent.”
Dreyfus saidHowever, it seems like traders have started booking profits, resulting in CHZ prices falling 6.2% between intraday high ($0.257) and low ($0.241) levels.
Chiliz Reverses Just Shy Of Becoming Overbought
The relative strength index for Chiliz reversed just as it was about to enter the overbought region yesterday. In detail, the RSI measures the magnitude of recent price changes to analyze overbought or oversold conditions.
Related: 3 reasons why Chiliz has rallied 155% in three months
Traders often consider an overbought RSI as a sell signal. Traders relying on RSI might have started the sell-off that led to Tuesday’s fall in CHZ prices. If the altcoin prices continue to fall, Chiliz would likely fall to support near $0.229.
In addition, a marketwide sell-off would likely see CHZ prices test support from its 20-day exponential moving average (20-day EMA, red wave) near $0.215.
Conversely, if CHZ prices restart moving up, the token would first have to face resistance near $0.255, a price level that Chiliz has struggled with for nearly all of 2022. The token broke above the $0.255 resistance for nearly ten days in Apr after falling below the resistance on Jan 19.
A move above the key resistance level would provide traders confidence. Consequently, CHZ prices might rally to $0.28 before any corrections pare gains.
At writing, CHZUSD was trading $0.241, down 4.51% on the day.
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