Chiliz (CHZ) has broken out from long- and short-term resistance levels. It is possible that it has begun a bullish trend reversal.
Since reaching an all-time high price of $0.94 in March 2021, CHZ had been falling inside a descending wedge. While doing so, it reached a low of $0.081 in May 2022.
The price has been increasing since and manages to break out from the wedge in the beginning of Aug. While doing so, it also reclaimed the $0.178 resistance area. The area had previously provided support since May 2021 before the price eventually broke down. Now, the area is expected to provide support once more.
The readings from the weekly RSI are bullish. The indicator has broken out from a descending resistance line (green) and increased above 50. Both of these are considered signs of a bullish trend.
If the upward movement continues, the closest resistance would be at $0.41. This is the 0.382 Fib retracement resistance level when measuring the entire downward movement since the all-time high.
The daily chart shows that the upward movement was preceded by a bullish divergence in the daily RSI (black line). The trend line of the divergence is still intact. Furthermore, the weekly RSI is currently above 50.
The upward movement led to a high of $0.265 on Aug 24. The price has been decreasing since, in a downward movement that was preceded by bearish divergence in the RSI (green line).
The main support levels are at $0.19, $0.17 and $0.15. These are the 0.382, 0.5 and 0.618 Fib retracement support levels.
As long as the RSI does not break down below the support line and the 50 line, the bullish structure remains intact.
Trader @BscGemHungers tweeted a chart of CHZ, stating that if the price breaks out from the descending resistance line it could increase towards $0.22 to $0.245.
Since the tweet, CHZ has broken out from the short-term resistance line. The main resistance area is found between $0.22 and $0.237, created by the 0.382 to 0.618 Fib retracement resistance levels. The area is likely to provide resistance and in turn create a lower high.
CHZ wave count analysis
The daily chart shows that CHZ began a five-wave upward movement on June 18. The Aug 24 high of $0.265 was likely the top of this five-wave movement.
If so, the price has been decreasing inside an A-B-C corrective structure since. Most likely, it has just completed wave A. Therefore, the proposed short-term upward movement would be part of the B wave, before another decrease completes the correction.
The 0.5 to 0.618 Fib retracement support area between $0.15 and $0.17 is likely to act as the bottom.
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