Tezos (XTZ) crypto-asset has made a remarkable comeback and is now among the top 50 coins by market cap. The XTZ price broke through a 230-day resistance trendline and its market capitalisation puts it in exalted company. The price rose 13% in a single day, resulting in a great deal of interest among investors and traders regarding the underlying reasons for the sudden rise as well as its potential implications. The XTZ price has been on a descending trend since February, reaching a low of $0.62 on August 17. After bouncing from this low a long lower wick (green icon) appeared, validating the $0.64 area as a significant support. Then, on October 10 the Tezos price finally broke out, surpassing the long standing resistance trendline.

The trading volume involved in the rise has been particularly noticeable, as it is the highest observed since September 2021, when the price reached its all-time high. This increase in activity has led some to speculate that a 'whale' market participant is acting with privileged information. However, skeptics have also been quick to suggest that the rally may be unsustainable and there are potential short-selling opportunities.

The daily Relative Strength Index (RSI) appears to favour the bulls. RSI readings above 50 and an upward trend indicate a bullish marketplace, both of which have been observed. The rally was preceded by a bullish divergence in the RSI (green line), which is when a rising momentum is accompanied by a price decrease. Lastly, the open interest (green icon) in the futures market has grown dramatically, potentially due to traders opening long or short positions.

If the increase continues, the Tezos price could rise by 25% and reach the next resistance at $0.90. However, a failure to close above the descending resistance trendline will most likely cause a 10% drop to the closest support area at $0.65. For now investors, traders and market watchers across the globe will be hopeful of a positive outcome for what has been an impressive and improbable rally.



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