Q4 2019 Tezos(XTZ) Price Forecast: Technical And Fundamental Analysis
Tezos is a cryptocurrency project that was launched in September 2018 after an extraordinary internal scandal that followed after an extraordinarily successful ICO in which Tezos raised $232 million. The nature of that scandal was in the difference of the companies that were in control of the project and in control of the raised funds. They were different entities the former being DLS (Dynamic Control Management) and the latter being Tezos Foundation.
The cryptocurrency issued by the project is tickered XTZ. Tezos works on a blockchain based on the liquid proof-of-stake consensus. Tezos has on-chain governance and self-amendments which are based on distributed decision making and evolutionary soft-forking. Tezos has several two features: the first one is two kinds of wallets — implicit and originated ones; the second one is baking which is an equivalent of minting for other cryptocurrencies underpinned by proof-of-stake consensus.
The implicit wallets have a public address starting with tz1 and two keys: public and private ones. The important function of the implicit wallets that they can make originated wallets. Originated wallets are necessary for delegating the funds held in it to bakers. Bakers are network members who get rewarded for generating new blocks like miners are rewarded for finding the right hash values in PoW-based cryptocurrencies.
At the time of writing Tezos is ranking in the 22nd place among cryptocurrencies by capitalisation with its capitalisation constituting $772 million as per CoinMarketCap website. At the time of writing Tezos is in a bearish market on the daily timeframe so far being considerably higher than its low for 2019 that occurred in January.
Tezos was in an upswing from March 9th to May 19th, 2019. The Fibonacci retracement drawn from the January low of $0.32 (Kraken quote) up to the May high shows a strong contingency of the price on the support and resistance levels formed by those levels while Tezos has been in a downtrend since its May’s high.
Thus, since June 4th till June 24th the price was basically fluctuating in the corridor formed by the 0.382 and 0.5 Fib levels. Later on, breaking down below 0.5 the price basically found support at 0.618 which was at $0.94. Bouncing up off that support level XTZ found resistance right at the 0.382 Fibonacci level where graphic resistance had also been formed when the price was bouncing between the 0.382 and 0.5 levels while in the sideways trend in June.
As for now, we can state that the downtrend is in the phase where it can be broken because each high in a downtrend must follow below the previous one as per the Dow trading theory. In this case, the latest high that was registered on July 4th is almost level with the previous June one. This situation may have several resolutions the most reasonable of which are two ones: a correction to the 0.5 Fibonacci level with a subsequent move up and a correction to the 0.618 Fibonacci level with a subsequent move up.
In the first scenario, the probability of the uptrend will be also increased by the reversed head-and-shoulders candlestick pattern which will inevitably form in case the price finds support at the 0.5 Fibonacci level. In the second scenario, the odds that the price will be supported by the 0.618 Fibonacci level are very high and in that case we will have a double bottom, which is a very strong bullish reversal pattern.
On July 3th, a Brazilian investment bank BTG Pactual and a Dubai-based investment platform Dalma published a press release in which they said that they would be using the Tezos blockchain to address a deal pipeline in excess of $1 billion for existing and prospective token issuances. On the back of that news XTZ surged against the downtrend that it was experiencing at that time.
The news was certainly a catalyst to the growth of the cryptocurrency and might have a continuous effect upon its price because it indicates substantial interest towards this cryptocurrency from classical financial institution which are ready to invest the sums that can alter the landscape of the entire cryptocurrency market.
Thus, it is another serious pro-growth factor which gives Tezos more bullish bias making long to mid-term long positions unarguably preferable over short ones.
For quarter 4 of 2019, we expect a rise in the price of Tezos due to the technical factors seen in the behaviour of the price in relation to the Fibonacci retracement drawn from the January low to the May high and the recent positive news feed on Tezos coming from classical investment institutions. Therefore, we recommend buying Tezos at the following price levels by the Kraken quote: