Tezos (XTZ) price action is deteriorating quickly after the shortfall from Coinbase earnings printed overnight at the US closing bell. While some cryptocurrencies saw a slight recovery in the ASIA PAC session, XTZ price sees investors booking gains as big tail risk. Its technical rejection adds to bearish pressures that outweigh bulls.
Investors are to expect a drop back towards $1.65-$1.60 in the best-case scenario or towards $1.20 at the low of 2022 should global markets perform a knee-jerk reaction and switch back to risk-off.
Tezos price dropped roughly 5% in just two trading days as investors got rattled by the earnings from Coinbase overnight. the US inflation numbers which will be key for the rest of the week is another factor to consider.
With this tail risk at hand, investors do not look eager to stay in their XTZ long positions and are pulling out before the print. Should the CPI number be a small decline or another jump, expect to see massive dollar strength across the board with cryptocurrencies collapsing.
XTZ price has two scenarios on the table where losses can be limited towards $1.65 – $1.60, where the monthly pivot or the 55-day Simple Moving Average (SMA) will provide support and limit any losses to around 10%.
The worst-case scenario would be a break below the 55-day SMA, which puts Tezos price action at risk of collapsing back towards $1.20, the low of June 18, 2022, and the low of 2022 overall. Traders would stand to lose 30% in that falling knife price action and see their efforts in this crypto summer being put back to square one.