- XTZ price is traversing in a descending parallel channel, hinting at a bullish breakout soon.
- A decisive close above $7.09 will confirm the start of an uptrend and propel Tezos to $9.17.
- A breakdown of the $6.51 support floor will invalidate the bullish thesis.
XTZ price has been on a downward trend since October 4 swing high. This pullback, however, comes in the form of a boon, as it forms a descending parallel channel.
Going forward, investors can expect Tezos to kick-start an uptrend if it manages to breach the crucial resistance level.
XTZ price reveals its bullish intentions
XTZ price has dropped roughly 25% from October 4 swing high at $9.17 to where it currently stands. This correction saw Tezos make three distinctive lower highs and lower lows. Connecting these swing points using trend lines shows the formation of a descending parallel channel.
A decisive close above $7.09 will serve as primary confirmation of a new uptrend’s start for XTZ price. While this move is bullish, Tezos will face multiple hurdles on its way. Initially, XTZ price needs to rally 7% to retest the first barrier at $7.58, followed by a 10% rally to $8.34. Clearing these two blockades will open the path for a move toward $9.17, which is roughly 30% away from the current position.
Market participants can XTZ price to undergo multiple yet minor retracements before it heads to $9.17. After tagging this barrier, if profit-taking intensifies, a pullback to immediate support levels will be possible.
XTZ/USDT 4-hour chart
Regardless of a bullish pattern, if XTZ price fails to hold above $6.51, it will indicate a weakness among buyers. However, a decisive close below the October 18 swing low at $6.37 will invalidate the bullish thesis.
In this case, investors can expect the XTZ price to descend to the support floor at $6.10.