In the run-up to the FIFA world cup, Chiliz (CHZ) has mainly traded in the green zone as most altcoins slumped in line with the general cryptocurrency market price movement.
After the start of the global tournament on November 20, the Chiliz network that allows teams to create fan tokens has, however, lost its bullish momentum, with bears appearing to take advantage. As things stand, the token is trading at $0.19 with daily losses of 16%, while the weekly chart has plunged by about 6%.
Why is CHZ dropping?
Although no specific reason can be highlighted for the CHZ drop, the fan token ecosystem has corrected in line with the general market uncertainty amid the lingering liquidity concerns. Interestingly, the token had attained a high of $0.27 on November 19, with the sell-off kicking in before the World Cup began.
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At the moment, it is still unclear if the token can regain its previous highs considering early investors are likely taking profits amid sustained selling pressure. With CHZ, consistently losing key support levels, crypto analyst by the pseudonym EGrind26 has suggested that the token’s latest performance might be a “buy the rumor, sell the news” event. According to the analyst:
“Chiliz so far looking like “buy the rumor, sell the news” Hold the 20 D SMA request was denied by the weekly close… Held the BMSB bottom and the RSI resistance line backtest. ”
At the same time, CHZ’s latest price movement comes after the asset moved below the 50-day SMA of $0.21. Therefore the token is facing the possibility of a further decline toward $0.14.
On the flip side, CHZ still has room to rally if the bulls rise to the occasion, powered by increasing buying pressure. The focus is on buyers to push the prices to about $0.20 and later target $0.25 and possibly take on the $0.30 resistance level.
Besides the activity from buyers, Chiliz is potentially relying on network development initiatives to give the asset more utility. For example, the platform’s CEO Alexandre Dreyfus stated that the upcoming Chiliz chain 2.0 rollout would transform the asset to new heights.
CHZ technical analysis
Furthermore, the CHZ technical analysis also aligns with the bearish trend with a summary recommending ‘sell’ at 15 while moving averages are gauging for a ‘strong sell’ at 13 on the daily gauges. Elsewhere, the CHZ oscillators are also for ‘sell’ at two.
Overall, the latest market performance goes against the pre-World Cup expectations. Notably, there was a general consensus that CHZ would likely target new all-time highs during the month-long tournaments.
Finally, the CHZ is not immune to the market conditions, especially the fallout from the FTX crypto exchange collapse that took a toll on altcoins.
Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.
