Zilliqa’s underlying crypto ZIL was healthy over the weekend, rising around 52% from its May 12 low. The token rally comes at a time when most of the top cryptocurrencies are experiencing a lot of sideways.
ZIL was trading at $0.061 at writing after gaining 19% in the last 24 hours. Even more impressive is that it is up 52% from its recent low of $0.039 on May 12th. The latter was the bottom of the recent bear market and led to some cooling. However, the market appears to have slumped as selling pressure has subsided.
The absence of significant buying pressure means the subsequent rally has subsided. This was also true for ZIL, but it appears to be leading a healthy rally. The real question is whether the rally will be sustainable or will it pave the way for another strong correction.
ZIL’s 50-day moving average hovers above its 200-day moving average, but is now showing signs of further decline. Both indicators formed a golden cross in mid-April and despite major rally attempts, prices remained bearish overall. For the price to sustain its upward trend, it needs to move up about 36% from its current position to the next Fibonacci level of $0.085.
On the other hand, to retest recent lows, it would need to drop 32% from current levels. ZIL’s RSI is currently approaching its neutral level, which is most likely to face some downward pressure. The MFI highlights the healthy build-up and the DMI suggests the continued uptrend will confirm the return of strong bullish momentum.
Can ZIL sustain its current rally?
On-chain metrics can provide a better overview of current conditions and provide insight into the sustainability of the rally. ZIL’s market cap has posted significant gains over the past few days, but the supply held by the whales hasn’t recorded any major gains. This could be a sign that the ongoing rally is gaining support from the retail market.
The whale’s lack of interest means that ZIL’s rally could be downgraded as some investors benefit. The current rally is fueled by accumulated accumulation since the launch of Zilliqa’s Web3 alliance on May 19th. The development activity indicator recorded significant activity prior to its release.
Current market outlook suggests that the market is likely to decline over the next several weeks. This explains why whales and organs are cautious. However, an unexpected market recovery could allow ZIL to maintain its current earnings and expand upside.