Zilliqa (ZIL) has created a double bottom pattern and broken out from a descending resistance line afterwards.
It is in the process of breaking out from a short-term bullish pattern, which could be the catalyst for an upward movement.
ZIL has been decreasing alongside a descending resistance line since reaching a high of $0.256 on May 6.
On May 19, it reached a low of $0.06 and bounced, creating a long lower wick. This validated the $0.065 horizontal area as support. Afterwards, it returned to the same level on June 22, creating a double bottom pattern. The pattern was combined with bullish divergence in the MACD.
It has been increasing since, and broke out from the descending resistance line on June 28.
Despite the breakout, ZIL has failed to maintain the upward movement. To the contrary, it has fallen to the $0.065 support area once more. In addition to this, both the RSI & Stochastic oscillator have yet to confirm the bullish trend.
Cryptocurrency trader @CryptoMichNL outlined a ZIL chart, stating that the token is consolidating in anticipation of an upward movement. Despite the previously outlined double bottom, the token has failed to move upwards. Therefore, a look at lower time-frames is required in order to determine if it will continue moving upwards.
The shorter-term two-hour chart shows that ZIL has been trading inside a descending wedge since June 30. On July 14, it reached the support line of the wedge and bounced.
The upward movement also caused a reclaim of the $0.066 minor support area (red circle).
Currently, ZIL is in the process of breaking out from the wedge. In addition, the MACD has generated bullish divergence and the RSI is moving upwards.
The closest resistance area is at $0.074. If it manages to clear it, the token would likely increase towards the range high at $0.087.
In March, ZIL broke out from a descending resistance line (dashed). Since then, it has thrice returned to validate the line as support (green icons), most recently doing so on June 22.
It seems that ZIL is now following another descending resistance line, which would create a descending wedge, known as a bullish pattern.
This indicates that a breakout is likely. While the MACD has generated bullish divergence and the Stochastic oscillator has made a bullish cross, the RSI is still below 50.
If a breakout occurs, the closest resistance is at 355 satoshis.
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