Chiliz coin has displayed a bullish pattern on the daily chart, signaling a shift in the longer-term downtrend. The range between $0.6 and $0.65 has now turned into a support level over the past three weeks.
An analysis using Fibonacci retracement levels based on the previous downtrend from May to August has identified potential bullish targets at $0.118 and $0.139.
Increased Buying Activity Boosts CHZ Price
The breakout in the bullish structure on the daily chart was observed on September 25th. Following this, the price retraced back to $0.6 before rallying by 23.7% within a week. The daily Relative Strength Index (RSI) has maintained levels above 50 for the past two weeks, indicating a strong bullish momentum.
Moreover, the On-Balance Volume (OBV) surged significantly from September 23rd onwards, reflecting a rise in trading volume as prices moved higher—a clear indication of increased buying pressure.
While Chiliz might encounter some resistance around the $0.76-$0.8 range, bullish sentiment is expected to prevail. Moving forward, key levels such as $0.1 and subsequent Fibonacci retracement levels could present challenges.
Concerns Arise as Spot CVD Declines
The recent uptick in Open Interest (OI) and price surge signaled a prevailing bullish sentiment. However, the strong rejection at $0.75 on October 9th triggered a shift towards bearish sentiment.
Despite the price rejection, OI continued to climb, coinciding with a drop in Bitcoin’s price from $62.3k. This suggested that short sellers were eager to bet against CHZ, explaining the prolonged increase in OI.
While spot Cumulative Volume Delta (CVD) exhibited a downward trend, the funding rate remained positive. When considering these factors collectively, it paints a short-term bearish outlook.
Disclaimer: The views expressed do not constitute financial advice, and are solely the opinion of the author.