December 3, 2024

Market players looking to short might enjoy seeing CHZ’s price pattern following an impressive bullish rally this week. The alternative token gained 55% within the past week and now explores a massive overbought region. Let us assess whether Chiliz can be a lucrative option for shorting opportunities.

First and foremost, a journey down the memory road. Historically, CHZ recorded a substantial retracement the previous two times it dipped into the overbought region. Analyzing the Relative Strength Index shows the indicator exhibits overbought conditions, translating to possible pullbacks.

The reversal expectations indicate the shift in Chiliz’s OBV (on-balance volume), which has pivoted. Meanwhile, this development highlights the anticipated price shift after hitting the $2.47 billion peak. That represents the highest volume attained in recent history.

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Downside Potential

The next thing to check is whether bears might build enough volume to catalyze sell-offs Well, the altcoin saw a substantial whale transaction increase over the past three days.

CHZ noted about 20 whale transfer counts worth more than $100,000 and around four worth beyond $1M on August 16. Moreover, there were 31 whale transfer counts worth more than $100K on August 17 & two worth more than $1 million.

Also, CHZ witnessed massive whale activity within the past 24 hours. The whale action over the past three days outweighs activity in the past days since August started. Chiliz’s 30-dayMVRV ratio indicated the presence of sell momentum, especially within the past three days. That shows whales have been trimming their holdings.

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Remember, surged sell momentum from whales will ultimately trigger the same in the retail sector. Nevertheless, investors interested in quick short positions should move cautiously. Also, whales could buy back within no time after a minor pullback. That remains possible if the overall market cues turn bullish.

Meanwhile, bears have confirmed their presence in the crypto space, with Bitcoin sliding after failure to overcome the $25K level. The bellwether crypto stretched its downside within the past 24 hours to trade below $22K at this publication.

Also, the overall cryptocurrency market capitalization declined by more than 6.5% over the past day to $1.05 trillion.

Also Read:  Indonesian Religious Leaders Declare Crypto as ‘Haram’

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