Chiliz (CHZ) is hovering around a liquidity zone for the long term despite a protracted period of decreasing market interest. The technical momentum of the asset has been coming down after its bounceback from the recent lows, while the derivatives market indicates changing positions of traders.
CHZ Remains Near Long-Term Liquidity Zone
Chiliz (CHZ) is currently trading at areas where there is relatively low market interest despite a multi-year decline.
Crypto analyst Flippix emphasized how the token is trading near the liquidity region, saying that the sentiment about the token has turned rather negative. However, the analyst remains interested in the coin in the longer term.
Source: Flippix’s X Post
Based on the analysis, it can be noted that CHZ has had a long-term downtrend, where its price declined from considerably higher levels.
Flippix spotted three upside levels that could occur for the asset, which include $0.143, $0.295, and $0.657. The last one is far from the present level and quite speculative.
Also Read: Chiliz Price Eyes Major Recovery to $0.65 as CHZ Liquid Staking Boosts Utility
CHZ Price Pulls Back After Recovery
From the TradingView chart analysis, it is clear that CHZ has continued its downward movement since dropping above the $0.02400 mark to trade at around the $0.01180 mark in mid-August.
However, there is a bounce in the price, which took it back up to around $0.01735. But now, selling pressure is seen interrupting this move.
Source: TradingView
On the last level mentioned, the trading price of CHZ is $0.01578, which showed a drop of 7.81% and ended its streak of rising prices.
The pullback suggests that the presence of selling activity in the recovery area still persists. On the other hand, prices have not fallen below the August mid-levels, maintaining the overall recovery trend.
Technical Indicators Show Cooling Momentum
According to technical indicators on a daily chart, the upward trend’s momentum is likely to be slowing down.
Indeed, the MACD blue signal line is still located above the orange line, thus keeping the positive crossover intact; however, the histogram bars start to get flatter. It means that despite the momentum weakening, it has not reversed yet.
At the same time, the RSI value for 14 days is 58.86. The indicator has pulled back from more overbought levels.
However, even though the momentum has been slowed down, the RSI still stays above the middle line, which shows that the buyers retain some power as CHZ trades near the recovery zone.
CHZ Derivatives Activity Sends Mixed Signals
The Coinglass information paints a complex picture of the derivatives trade for CHZ. There has been a positive trend of a 9.22% increase in trading volume, which shows a higher level of trading going on in the derivatives market. But the negative trend of open interest is 16.21% to $24.37 million.
Source: Coinglass
The difference between the two is indicative of trading activity taking place even as positions are being closed at the same time.
The activity may be due to precautionary measures taken by the traders in light of CHZ’s recent price action. In the wider context of the market, the figures demonstrate a shift in position.
Chiliz Burns 13.46 Million CHZ Tokens
Apart from the innovations mentioned above, Chiliz announced token burn in connection with their buyback and burn process.
According to Chiliz Group, a total of 13,459,678 CHZ tokens have been burned, which corresponds to 10% of revenues earned from FAN TOKEN® sales in July. The tokens are valued at $182,888 at the time of burn.
This system works based on the mentioned cycle whereby FAN TOKEN® transactions generate revenue, and this is followed by buyback of CHZ tokens and burning.
The effects of this particular burn will depend on the future activity and demand for the tokens in addition to other factors in the market environment at large.
What Comes Next for the CHZ price?
The levels that have been marked out by Flippix pay considerable importance to the long-term recovery of CHZ from its present depressed price zone.
The levels of $0.143, $0.295, and $0.657 are considerably higher than the latest price quoted and will need a strong level of buying interest to come into play.
There is more than one thing that traders need to keep an eye on due to the presence of subdued sentiment, reduced technical steam, derivatives position divergence, and continuous token burning.
The potential of CHZ to consolidate after its most recent retracement might make a difference between further growth or a return back to lows.
Also Read: Chiliz (CHZ) Price Eyes $1 as Sports Tokenization Drives New Bullish Case
This article contains market analysis and price predictions. These are not guarantees. Crypto markets are volatile. Always DYOR. Not financial advice.
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