Tezos has faced a massive influx of selling pressure today that has sent it reeling lower, making it one of the worst-performing major altcoins at the moment.
This weakness has come about as the aggregated market shows some signs of being in a precarious position, with Ethereum plunging towards $400 overnight while most other altcoins also post intense losses.
This latest bout of selling pressure sent the crypto reeling down towards its key support of $3.50 that was tested on multiple occasions earlier this week.
Analysts believe that the ongoing selloff will prove to be highly fleeting, as multiple factors now indicate that XTZ is highly oversold and that it is poised to post a strong reaction to this key support.
One trader even believes that the cryptocurrency could soon rally up towards its all-time highs in the coming months.
Tezos (XTZ) Plunges Lower as It Tests Crucial Bedrock Support Level
At the time of writing, Tezos is trading down over 6% at its current price of $3.60.
This is around the price at which the crypto has been trading throughout the past few days, as it tapped lows of $3.50 earlier this week before seeing a strong rebound.
This confirmed that this level is strong support, and XTZ has so far been respecting it.
That being said, a decline below this level could be enough to spark an influx of selling pressure that sends it reeling even lower.
Because this level has been established as a strong base of support, however, a rebound here could confirm this as a long-term bottom and provide the cryptocurrency with the momentum it needs to erase its recent losses.
Analyst: XTZ Highly Oversold, Poised to “Launch” Towards All-Time Highs
While speaking about the cryptocurrency’s current outlook, one analyst explained that multiple indicators are showing that Tezos is highly oversold.
He concludes that this is a sign that that upside is imminent, and that it may soon be able to explode higher.
The trader is also pointing to a recent support-resistance flip that it was able to conduct while looking towards its Bitcoin trading pair.
“Just loaded my super heavy XTZ bag. Oversold momentum on 4h, 12h with buy signals across the timeframes with perfect S/R flip reversal. Remember when I said XTZ could pull LINK? It’s time to launch the ATH mission and send it back to the moon where it belongs.”
Image Courtesy of CryptoBirb. Chart via TradingView.
The confluence of all these factors does seem to suggest that upside may be imminent for Tezos, despite the weakness that it is currently expressing.
Featured image from Unsplash. Charts from TradingView.