CHZ is poised for a breakout but the market could take another plunge

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Dis­claimer: The find­ings of the fol­low­ing analy­sis are the sole opin­ions of the writer and should not be con­sid­ered invest­ment advice.

Chiliz [CHZ] has a mar­ket cap of $1.4 bil­lion and is ranked 37th on Coin­Mar­ket­Cap. The sports and enter­tain­ment token has made numer­ous part­ner­ships in the past year.

Its vis­i­bil­i­ty and the upcom­ing FIFA World Cup could see a surge in demand for CHZ. On the charts, a bull­ish bias seemed war­rant­ed based on tech­ni­cal analy­sis. Can Chiliz surge above the $0.24 zone of resis­tance that the bulls have grap­pled with for a month?

CHZ- 3‑Day Chart

Chiliz on the verge of a bullish breakout, can the World Cup hype help?

Source: CHZ/USDT on TradingView

The three-day chart shows the asset in a strong down­trend. Indeed, Chiliz had not beat­en its pre­vi­ous low­er high from Novem­ber to June. Slow­ly, this began to shift as demand began to arrive with force in July and August. In August, the price broke above the low­er highs it set in May, and shift­ed the mar­ket struc­ture to bullish.

A trend­line resis­tance (yel­low) from Novem­ber was also bro­ken in the recent past. At the time of writ­ing, the $0.247 resis­tance lev­el was the tar­get for bulls to flip to sup­port. If this can occur, anoth­er leg upward toward $0.33 could begin to brew.

One thing to note was that, even as CHZ pushed high­er, the Rel­a­tive Strength Index (RSI) could fail to make a high­er high. This bear­ish diver­gence (orange) if con­firmed could pre­cede a sig­nif­i­cant pull­back for CHZ.

Rationale

Chiliz on the verge of a bullish breakout, can the World Cup hype help?

Source: CHZ/USDT on TradingView

The 12-hour chart showed that the demand has indeed been on the rise since late June. The On-Bal­ance Vol­ume (OBV) has made steady high­er lows. At the time of writ­ing, the RSI was also above the neu­tral 50 line to show strong bull­ish momen­tum. The past month has also seen strong trad­ing vol­ume, exhib­it­ed by the high vol­ume bars. This showed bulls and bears skir­mish­ing hard in the $0.16-$0.24 region.

The two high­light­ed cyan box­es have served as sup­port and resis­tance belts over the past month. A long-term investor antic­i­pat­ing a bull­ish move on CHZ can look to buy a retest of both box­es, with a con­ser­v­a­tive stop-loss set below $0.167.

Conclusion

The World Cup kicks off in two months, and that could leave plen­ty of time for Chiliz to have a bull­ish run. Bit­coin has seen intense sell­ing vol­ume in recent weeks.

Its rejec­tion at $24k in August, and $22.6k this month, meant the trend was firm­ly in favor of the bears. If this can reverse, Chiliz could surge as high as $0.43-$0.44 and pos­si­bly higher.

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