Zilliqa’s native crypto ZIL enjoyed a healthy bullish performance over the weekend, pushing it up about 52% from its May 12 bottom. The rally of the token comes at a time when most of the top cryptocurrencies are experiencing a lot of sideways action.

ZIL was trading at $0.061 at the time of writing, after rallying 19% in the past 24 hours. What’s even more impressive is the 52% rally from the latest local low of $0.039 on May 12. The latter was the bottom of the last bear market, leading to a bit of a cooling off. After that, however, the markets seem to have stagnated as the selling pressure eased.

The lack of significant buying pressure means any subsequent rallies have been muted. This was also the case for ZIL, but it seems to be pulling a healthy rally. The real question is whether the rally is sustainable or whether it will pave the way for another strong correction.

Source: TradingView

ZIL’s 50-day moving average remains above the 200-day MA, although there are currently signs of more decline. The two indicators formed a golden cross in mid-April and while a major rally attempt was made, the price generally remained bearish. If the price were to maintain its sustained rally, it should rise about 36% from its current position to its next Fibonacci level at $0.085.

Source: TradingView

On the other hand, a retest of the latest low would require a 32% drop from current levels. ZIL’s RSI is currently approaching neutral levels where it will most likely experience some downward pressure. The MFI points to healthy accumulation and the DMI suggests that a sustained upward trend would confirm the return of strong bullish momentum.

Can ZIL sustain the current rally?

On-chain stats can provide a better overview of current conditions and insight into the sustainability of the rally. ZIL’s market cap has seen a significant increase in recent days, but whale supply has not seen a significant increase. This could be a sign that the ongoing rally is largely supported by the retail market.

Source: Santiment

A lack of interest from the whales means that ZIL’s rally may be due for a downward correction as some investors take profits. The current rally was fueled by accumulation on the heels of the launch of Zilliqa’s Web3 alliance on May 19. The development activity statistic recorded significant activity in the days leading up to the announcement.

The current market outlook suggests a significant chance that the market will slide down in the coming weeks. This explains why whales and institutions are cautious. However, an unexpected market recovery could allow ZIL to maintain its current gains and extend its upside.

This post Zilliqa [ZIL] could follow a downward trajectory, but here’s the caveat:

was published first on https://ambcrypto.com/zilliqa-zil-might-be-headed-an-a-downward-trajectory-but-heres-the-caveat/


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