Tezos price action could still rally 8%, as XTZ price gets underpinned at $1.40

• Tezos price action sees small gains on the docket for today after bears erased the weekly gains.
• XTZ price could see its rally continue today and Friday as price action gets underpinned.
• An 8% rally could occur before bears use a technical cap to drive price action back into the ground.

Tezos (XTZ) price action dropped sharply to the downside after most of the incurred gains from Monday and Tuesday were erased in a move to the downside. Meanwhile, bulls showed their hand as $1.40 got underpinned by buyers, pushing price action back up, away from the level. More upside could be at hand should equity markets take the lead and steam higher, potentially offering a small 8% gain for Tezos price action by Friday.

XTZ price in for a small rebound higher

Tezos price action has seen its efforts gone with the wind by the US closing bell as the last-minute recovery was just too small to still eke out gains for the day. However, a small silver lining comes with the price action getting underpinned at $1.40 with bulls catching the dip and turning price action around. Back up for today, more gains could be set for this week, should other asset classes follow suit.

XTZ price thus could be in for some more upside potential if it can break above this week’s high and touch $1.50. That move would be perceived as a sharp bullish reaction and make bears back off a bit, offering more room for bulls to push this rally further north. On the topside, however, the 55-day Simple Moving Average (SMA) might fall in line with the monthly pivot, refraining bulls from making more than 8% profit.

XTZ/USD Daily chart

Behind the scenes, fundamentally, nothing has changed. The same big tail risks are still very much alive and, at the moment, only look like escalating further. Russia could start using nuclear weapons, the eurozone could end up without gas this winter, Taiwan could be invaded by China at any moment or North Korea could launch a missile attack at mainland Japan. Seeing these tail risks, expect small upticks in the market with bigger downticks. In the end, this will probably lead to XTZ price action breaking below $1.40 and looking to retest a target of $1.19 to the downside.