XTZ/USD: Strong Bearish Case Building – Technical AnalysisLooking at the XTZ/USD daily chart, multiple technical indicators and price action are aligning to present a compelling bearish case. Here's why I'm convinced we're heading lower:
Key Bearish Evidence:
MACD Structure
The MACD indicator is showing textbook bearish signals:
Clear bearish crossover on the daily timeframe
Histogram bars turning increasingly negative
Momentum clearly shifting downward
This suggests strong selling pressure and weakening buying interest.
RSI Confirmation
The RSI tells a clear story:
Recently rejected from overbought territory
Making lower highs alongside price
Currently showing downward momentum
No signs of positive divergence to suggest a bottom
Price Action Analysis
The price structure couldn't be more bearish:
Failed to hold above the $1.65 resistance
Series of lower highs and lower lows
Recently broke below key moving averages
Volume increasing on down moves
Market Structure
After the November rally, we're seeing classic distribution patterns:
Sharp rejection from recent highs
Increasing selling volume
Failed attempts to reclaim higher levels
Breakdown of support levels
Risk Levels:
Immediate resistance: $1.65
Critical support: $1.20
Target zone: $0.75 (Previous accumulation area)
What Makes This Setup Particularly Bearish:
The recent rally was sharp but unsustainable
Multiple timeframe confirmation of bearish momentum
Clear volume profile supporting the downside move
Technical indicators all aligning for further downside
The most telling aspect is how quickly the recent gains were given back, suggesting the bulls are exhausted and bears are taking control. Until we see a clear break and hold above $1.65, the path of least resistance remains firmly to the downside.
Traders should watch the $1.20 support level closely - a break below this could accelerate the downward movement toward the previous accumulation zone at $0.75.
