- Zilliqa recovered from the massive freefall in November but stalled at $0.035.
- A sell signal on the 6-hour chart is expected to validate the bearish narrative targeting $0.027.
Zilliqa has recovered almost all the gains lost last week amid the widespread correction in the cryptocurrency market. However, the altcoin did not rise to November’s peak at $0.037; instead, a December high has been posted at $0.035. As the uptrend loses momentum, ZIL is on the verge of a breakdown that could retest $0.027.
Zilliqa upside hits a barrier as correction looms
ZIL is trading at $0.033 at the time of writing after bouncing off the hurdle at $0.035. A sell signal has been presented by the TD Sequential indicator on the 6-hour chart. The bearish outlook manifested in a green nine candlestick. Usually, sell signals of this nature forecast a correction of one to four daily candlesticks.
An upsurge in sell orders around the prevailing price levels might assist in validating the bearish outlook. In this case, a breakdown would begin to form toward the next critical support levels. The 50% Fibonacci level has highlighted support at $0.03. The second support holds the ground at $0.027, as illustrated by the 38.2% Fibonacci.
ZIL/USD 6-hour chart
On the other hand, traders must be aware that the pessimistic outlook will be invalidated if Zilliqa steps above the recent high at $0.037. Trading above this critical level might see an increase in demand for ZIL, thus boosting the token towards $0.04 and $0.045, respectively. Similarly, a new bullish outlook may come into the picture if Zilliqa closes the day above the 78.6% Fibonacci level.
