- Chiliz price action drops on the back of negative news out of China early Monday.
- CHZ price dipped firmly below $0.20 as lockdowns in China emerged overnight.
- Expect a drop in the coming days before price action swings back up by Friday.
Chiliz (CHZ) price action slid lower this morning as the ASIA PAC session rolled over with equities lower, the Renminbi weaker, and safe havens such as the US dollar in high demand as sudden lockdowns emerged over the weekend. Although this is not uncommon for China, it is peculiar as after the Chinese Party Congress pledges were made to avoid lockdowns and reopen the economy. Expect a turnaround once this news fades into the background and US spending pops, with black Friday set to kick in this week.
CHZ is nearing the turning point for a swing trade this week
Chiliz price is not yet recovering from the nearly 20% decline it underwent on Sunday, as traders were already throwing out their positions over the weekend. The news from China and the sudden lockdowns triggered a cramp in markets as traders grew baffled. A few weeks earlier, the Party Congress mentioned that lockdowns were to be avoided as authorities wanted to reopen the economy fully. The sidestep, with some lockdowns issued for residents to stay indoors for five days, put risk-off sentiment back on the table as risk asset classes began selling off Monday morning.
CHZ will slide further to the downside on the back of this, as overall for Monday and Tuesday there is a very light economic calendar with no natural elements that could push back against the bearish mood at hand. Expect a dip of roughly 10% for Monday and Tuesday combined, with a floor at $0.177. That level or plateau is perfect for bouncing off and triggering a rally higher. Expect by Friday to see a 40% gain and price action residing near $0.250 after the US Thanksgiving and Black Friday events.
CHZ/USD daily chart
Should more external bearish elements kick in during the coming days, expect the floor at $0.177 to give way. Luckily, just below there, the monthly S1 support level is present, together with the 200-day Simple Moving Average (SMA) as a tiered failsafe system to catch any dropping knives. Unfortunately, should that 200-day SMA not hold, the road is open for a 25% implosion toward $0.13 at the monthly S2.
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