- Chiliz breaks out of a falling wedge pattern aiming for $0.73.
- The profit or loss ratio reveals that CHZ is still in a buy zone.
- A declining network growth could limit price action, sabotaging upswing to $0.74.
Chiliz is among the few crypto assets recording double-digit gains in the market. Data by CoinGecko shows that CHZ has accrued over 10% in gains while trading at $0.53. The breakout above the technical pattern will likely flip the trend bullish as highs above $0.7 beckon.
Chiliz Lifts Above Falling Wedge Pattern
The four-hour chart brings to light the formation of a falling wedge. This pattern forms after the asset posts a substantial uptick in price but stalls, leading to a correction ahead of a consolidation period. The wedge is created by two trend lines, one connecting the lower highs and a series of lower lows.
A falling wedge is a reversal pattern and points toward an incoming uptrend. The breakout begins as the price slices through the upper trendline. Wedges have exact breakout targets measured from the pattern's highest to lowest points, as shown on the chart.
CHZ/USD Four-Hour Chart
Chiliz breakout started over the last 24 hours but was challenged at $0.6. Hence, the need to seek higher support, probably above $0.5. Stability in the market may ensure that the pattern's impact holds in the short term, allowing bulls to focus on increasing the tailwind for gains toward $0.73.
This same uptrend has been reinforced by the Moving Average Convergence Divergence (MACD). The indicator is above the midline, while the MACD line (blue) has crossed above the signal line. If the technical setup remains the same, Chiliz will renew the uptrend heading for the wedge pattern's target.
The market value realized value (MVRV) ratio by Santiment has confirmed that Chiliz is back in the buy zone. This metric tracks the average profit or loss of the holders of CHZ tokens moved over the last 30 days compared to the price when each token last moved.
A low MVRV ratio of around 1% and below unveils that most CHZ holders are at a loss are yet to break even. It also implies that investors are unlikely to sell but prefer to hold longer. In other words, selling pressure will likely go down, leaving Chiliz with the slightest resistance to face.
Chiliz MVRV Ratio
Chiliz Bearish Outlook Could Sabotage the Uptrend
The number of new addresses joining the network continues to drop appreciably, suggesting that the project could be losing traction regarding adoption. Only 1,214 addresses have joined the protocol over the last 24 hours as opposed to a 30-day high of roughly 3,380.
Chiliz Network Growth
Therefore, the significant drop negatively affects the regular inflow and outflow of tokens, on the network and is a bearish signal. As soon as investors start paying attention to Chiliz, the uptrend would return with a bang, making $0.73 a conservative prediction.