Key Takeaways
XTZ rallied 56.9% hitting a 6-month high of $1.22 before retracing to $1.169 by press time. Although whales have dominated the market, profit-taking threatens to disrupt the uptrend.
Tezos [XTZ] has traded within an ascending channel since its breakout from a prolonged consolidation one week ago.
In fact, over the past week, Tezos has jumped by a whopping 80% extending this bullish outlook by 112% in the last 30 days.
On the daily charts, Tezos rallied 47.53% to reach a 6-month high of $1.22 before slightly retracing to $1.169 by press time. Over the same period, the altcoin’s trading volume surged 1061% to $1.17 billion.
Additionally, Tezos’ market cap reached $1.22 billion for the first time since January, reflecting increased capital inflows and on-chain activity.
But is this the start of a sustained recovery and uptrend?
Whales inspire XTZ’s rally
As markets recovered, Tezos whales emerged from their long period of inactivity. According to CryptoQuant, the Tezos Spot Average Order Size turned green and has remained so for the past week.
Source: CryptoQuant
When this metric turns green, it implies that Spot markets are dominated by Big Whale Orders, reflecting increased whale activity.
Typically, whales can return to the market to either close positions that have been held at a loss or accumulate.
Interestingly, when we examine Tezos Spot Buy Sell Volume, we determine that these whales are mostly accumulating.
As a result, Tezos saw two consecutive days of higher buying pressure relative to selling pressure. On July 19th, XTZ saw 72.2 million in Buy Volume compared to 71.72 million in Sell volume, according to Coinalyze.
Source: Coinalyze
The same happened on the 20th of July, with Buy Volume rising to 37.87 million compared to 34.54 million in Sell Volume.
As a result, the altcoin saw a Buy Sell Delta of 483k and 3.33 million, respectively, a clear sign of spot aggressive accumulation.
Futures are even more bullish
As the market rallied, investors rushed into the market to take strategic positions, particularly long positions.
According to CoinGlass, Open Interest soared by 343% to $138 million while Derivatives Volume spiked 2832% to $3.05 billion.
Such a spike in both OI and Volume signals increased capital inflow and participation in the Futures market.
Source: Coinglass
As a result, Tezos’ long-short ratio jumped to 1.1, signaling a higher demand for long positions. When investors take longer positions, it implies that they are actively betting on prices to continue rising.
Profit takers’ threat soars too
Unsurprisingly, as prices soared, so did the appetite to take profit. According to CoinGlass, Tezos Spot Netflow surged to an 8-month high of $4.5 million, reflecting increased exchange deposits.
Source: CoinGlass
Typically, when Netflow rises, it implies that investors are sending more assets to exchanges than they’re withdrawing. Such a market trend indicates that investors are aggressively cashing out.
Historically, increased exchange deposits have preceded price decline as downward pressure rises.
Can XTZ sustain the uptrend?
According to AMBCrypto’s analysis, Tezos experienced a substantial upsurge amid increased whale accumulation.
For that reason, the altcoin’s Relative Strength Index (RSI) surged from a low of 43 to 93 at press time, touching the overbought zone.
Likewise, Chaikin Money Flow (CMF) jumped from 0.08 to 0.27, confirming higher buying pressure.
Source: TradingView
Simply put, XTZ experienced favorable conditions, inspired by whales, thus positioning the altcoin for more gains.
That said, if whales maintain the current momentum, XTZ will likely continue its uptrend and target $1.50.
However, if profit taking witnessed recently overwhelms the market, Tezos could see a correction and drop to $0.93.