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Tezos long-term Price Analysis: 27 August

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Source: Pixabay

Tezos, the cryptocurrency ranked 14th on the charts with a market cap of $2.38 billion, has been hurt following the token’s recent depreciation. The fall in question was worth around 26%, with respect to the price’s press time position at $3.29.

There are two trades that can be taken here; the first is the short position that will push the price down by 7.22% and towards its support at $3.05. The second trade would be to wait for the price to test this support and then enter a long position from here.

The first trade has lower profits with little risk. However, the second trade has huge upsides but is even riskier.

Tezos 1-day chart

Source: XTZUSD on TradingView

The one-day chart showed Tezos breaking down its range, as mentioned in a previous article. Now, the immediate support was at $3.09, but also present was the inclining support starting from the bounce at 200 DMA [purple] and extending all the way up to 02 August. If Tezos continues to fall on the charts, then the price will hit a confluence of support.

This, with the indicators’ help, is the decision leading to the long yet risky position mentioned above.

In addition to the same, the 100 DMA [pinnk] will also be the last line of defense should the above support levels fail. The 200 DMA was also present in the worst-case scenario and will support the price from falling any further than $2.66.

Tezos 1-Day chart

Source: XTZUSD TradingView

The entry position would be a bounce from the support at $3.055 with stop-loss at $2.84. The bounce from here has the potential to push the price back to its recent high of $4.45. The trade would have a risk-to-reward ratio of 4.28.

Supporting this was the Stochastic RSI indicator since it was deep in the oversold territory and was vying for a bullish crossover. This crossover will be achieved if the price bounces of the aforementioned support level.

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Akash is a full-time cryptocurrency writer and an analyst at AMBCrypto. He is an engineering graduate with an avid interest in finance and economics. Attracted to the chaos of trading, Akash has invested in BTC, ETH and XRP for educational purposes.

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