Story by: Horus Hughes
Since the start of the year Bitcoin (BTC) has gained approximately 41% and on Feb. 5 the crypto asset thrilled investors as the price broke through the $9,500 resistance and rallied to set a new yearly high at $9,745.
In light of Bitcoin’s strong trend reversal from its 2019 bottom at $6,400, there is a growing number of altcoins that have far eclipsed Bitcoin’s recent gains. Take, for example, Tezos (XTZ) which to date has rallied 205% off its October 2018 low at $0.728.
Crypto market daily price chart. Source: Coin360
As Bitcoin rallied 6.14%, XTZ blitzed 15.76% to top a 19-month high at $2.24. Aside from the recent bullish market trend that is driving many altcoins to produce double-digit gains, a growing number of crypto exchanges now offer staking rewards for investors who hold XTZ.
This week Binance also announced that it had added XTZ/USDT perpetual contracts. The new trading option will allow traders to choose between 1-50x leverage on their XTZ/USDT positions.
Let’s take a look at the charts to see what the future may hold for Tezos.
XTZ USD daily chart. Source: TradingView
After crossing above the $1.15 resistance and the 200-day moving average (DMA) on Nov. 6, 2019, XTZ closed 2018 with a strong multi-month rally which brought the price just $0.02 away from its 2019 high at $1.86. Since forming a local bottom at $1.25 on Jan. 2, XTZ has rallied 80.29%.
XTZ USD 6-hour chart. Source: TradingView
At the time of publishing, the XTZ/USD pair is still strongly bullish as traders are maintaining purchasing volume and the relative strength index (RSI) continues to push deeper into the overbought region but eventually a pullback must occur.
When this occurs traders can simply follow the Fibonacci retracement levels and volume profile visible range (VPVR) as the current structure aligns well with both indicators.
XTZ could pull back to the 23.6% Fib retracement at $2.011 and below the $2.011 to $1.912 zone traders could see the price retrace to the 50% Fib retracement at $1.739 where the price history shows stronger support and a high volume node on the VPVR.
Below this support traders can look to play the golden pocket bounce between $1.633 and $1.574 (the 61.8% and 65% Fib retracement). In the unlikely event that XTZ retraced the entire rally from $1.231 to $2.246, the 200-DMA will most likely function as strong support.
In the meantime, traders are advised to keep an eye on trading volume in the shorter time frames, and also watch to see if the RSI begins to turn down from the overbought zone or if the MACD begins to curl down towards the signal line.
Tezos weekly price chart. Source: Coin360
The overall cryptocurrency market cap now stands at $272.5 billion and Bitcoin’s dominance rate is 64.2%. Tezos market cap has risen to $1.56 billion and the altcoin is close to flipping its positioning with Cardano (ADA) to rank among the top-10 cryptocurrencies by market capitalization.
A handful of altcoins also rallied alongside Bitcoin. A few top performers were NEM (XEM) with a 28% gain, Bitcoin Cash (BCH) which gained 14.34% and Bitcoin SV (BSV) at 12.04%. Ether (ETH) also continued to rally, adding 7.89% as the price rose to $205.27.by