Tezos (XTZ) Price Surges: What's Behind the 112% Rally?
Key Takeaways
- XTZ price rallied, hitting a 6-month high of $1.22 before settling at $1.169.
- Profit-taking could present a challenge to the recent uptrend.
Tezos [XTZ] has been trading upwards since breaking out of a consolidation period a week ago.
Over the past month, Tezos has increased by 112%, extending its bullish trend.
On the daily charts, Tezos rose by 47.53%, reaching a 6-month high of $1.22, with a slight retrace to $1.169. Trading volume surged by 1061% to $1.17 billion.
Tezos' market cap hit $1.22 billion, the highest since January, driven by increased capital inflow and on-chain activity.
But can this rally be sustained?
Accumulation Drives XTZ's Rally
As markets recovered, accumulation in the Tezos markets increased. The Tezos Spot Average Order Size turned positive, indicating increased activity.
Typically, accumulation could mean closing positions held at a loss, or strategic accumulation.
Interestingly, examination of Tezos Spot Buy Sell Volume, showed accumulation is present.
Tezos experienced higher buying pressure relative to selling pressure. On July 19th, XTZ saw $72.2 million in Buy Volume compared to $71.72 million in Sell volume, according to Coinalyze.
The same trend continued on July 20th, with Buy Volume rising to $37.87 million compared to $34.54 million in Sell Volume.
This resulted in Buy Sell Deltas of 483k and 3.33 million, respectively, indicating spot accumulation.
Futures Market Shows Bullish Signals
As the market rallied, investors entered the market, particularly with long positions.
According to CoinGlass, Open Interest soared by 343% to $138 million, while Derivatives Volume spiked 2832% to $3.05 billion.
The rise in both Open Interest and Volume signals increased capital inflow and market participation.
Tezos’ long-short ratio jumped to 1.1, indicating higher demand for long positions, implying that investors expect prices to continue rising.
Profit Taking Concerns
As prices increased, so did the desire to take profit. According to CoinGlass, Tezos Spot Netflow surged to an 8-month high of $4.5 million, reflecting increased exchange deposits.
Typically, increased Netflow indicates investors are sending more assets to exchanges, suggesting potential cash-out intentions.
Historically, increased exchange deposits have preceded price declines as downward pressure rises.
Can XTZ Maintain the Uptrend?
AMBCrypto’s analysis indicates Tezos experienced a substantial upsurge amid increased accumulation.
The Relative Strength Index (RSI) surged from 43 to 93, reaching overbought territory. Additionally, the Chaikin Money Flow (CMF) jumped from 0.08 to 0.27, confirming higher buying pressure.
If the current momentum is maintained, XTZ could target $1.50. However, increased profit-taking could lead to a correction, potentially dropping the price to $0.93.