BELOBABA Analysis: Chiliz

BELOBABA Analysis: Chiliz

The close of August leaves us with another month of correction in the crypto market’s largest capitalization assets, in which we have seen $BTC fall by -14% and $ETH by -7%. 

Although the support of June and July, located between $18k and $19k in $BTC is still respected. A new low could reactivate the downtrend and cause a new downward continuation movement. We will have to be especially attentive to that support area in a month of September that historically is usually negative for the crypto market. 

No hay texto alternativo para esta imagen

This steeper drop in $BTC compared to other large-cap tokens is clearly visible on BTC’s dominance chart, which is already very close to macro support at 39%, the bottom of that sideways channel it has been tracing for over a year now.

No hay texto alternativo para esta imagen

Despite this corrective movement in the market, we have detected some tokens that have closed August with a good result, as is the case of $CHZ. The Chiliz token that accumulated a result of +75% at the end of the month.

Chiliz is considered the leading digital currency in sports and entertainment. Many of you will know it for being the driving force behind the first blockchain-based rewards and fan engagement platform, Socios.com. 

This platform provides sports and entertainment entities with a branded Fan Token (FTO) platform that is used as a fan interaction tool to help these organizations engage and monetize their audiences more effectively.

Fans can purchase and trade Fan Tokens and have the ability to participate and vote in club-centric polls and sweepstakes. 

Socios.com features major sports and e-sports entities, such as AC Milan, Paris Saint-Germain and FC Barcelona.

The Chiliz token, CHZ, is used to buy these Fan Tokens, which give the user the power of decision through surveys and access to sweepstakes. 

If we focus on the evolution of the price of $CHZ, there are several factors that alerted us to the possible upward movement.

No hay texto alternativo para esta imagen

First of all I would like to highlight the detection of a $0.085 support zone, where the price started to make higher highs and higher lows since the second half of June.

In this period was the creation of the Bullish Butterfly pattern that we analyzed last week and was a turning point for the beginning of the upward movement from the lows. I leave you the link to the mentioned post:https://www.linkedin.com/embeds/publishingEmbed.html?articleId=9215364509099123599&li_theme=light

In this same support zone there is also a bullish divergence of the RSI on the daily chart that anticipated the reversal movement.

If we focus on the July move we can identify a Double Bottom figure between the mentioned support at 0.085 and the June highs in the $0.13-$0.14 area (marked in the chart above).

This figure was confirmed on 1/08, with a bullish move that pierced the neckline located in the $0.13-$0.14 area and preceding a move against the main trend that led to the rise to $0.24, so the target of the figure is considered achieved.

Another aspect to note is the increase in trading volume following the confirmation of the figure, which is interpreted as a higher probability that the figure will reach its target. This can be seen more clearly in the following 4h chart.

No hay texto alternativo para esta imagen

As we can see, when the neckline is broken, the trading volume increases notably, maintaining a higher average during the month of August.

Regarding the current situation, we see how the price has pierced the downtrend line, but we cannot consider this as broken until we see a maximum above the confirmed fractal, which is currently at $0.33, as can be seen in the graph to days.

No hay texto alternativo para esta imagen

Therefore, until a top is detected above this $0.33 resistance zone, the predominant trend will remain bearish. It is also noteworthy that a bearish RSI divergence has been detected at the last high, although this has occurred above the 70 level, which makes it less likely to be fulfilled and could lead to a new high that would leave new divergences.

Remember that divergences are only warnings that the price and trading volume are not in line and at no time can be a sole reason to trade, but must be accompanied by a previous analysis and are used as a verification of the analysis performed.

Finally, I would like to point out that the situation of the moving averages at 50 and 200 periods are approaching a possible bullish crossover or “Golden Cross” which could generate a new bullish impulse in search of the mentioned resistance, but we will have to be paying attention to its evolution since the crossover has not yet occurred and the situation could be reversed if the downtrend is activated.

Finally, remember that nothing discussed in our articles can be considered as investment advice. Everyone must do their own analysis and develop their own trading strategy. The Belobaba Crypto Fund team only shows our analysis and investment tolos, and how they help us in our operations when making decisions.

KEEP IN TOUCH & SUBSCRIBE TO OUR MARKET NEWS

This us the World Wide Investor Site, are you resident of the United States of America?