Zilliqa is Now Most Overbought in History, What it means?
Zilliqa (ZIL) is the best crypto with over 131% gains in the last 7 days. ZIL has also printed its biggest one-day rally in history on March 26, following a 99% rally. However, this price development has sent the RSI oscillator to its highest level in history.
Below, we’re going to look at several technical factors to better understand what’s going on behind the curtain.
RSI Oscillator
The current highest in history Relative Strength Index (RSI) reading of 89.68 has surpassed the previous all-time high reached in February 2020.
While the price reached extreme overbought readings, we can’t solely rely on the RSI as a standalone tool.
In this regard, here are some bullish technical developments worth taking into consideration:
We broke the downward sloping trendline that connects the all-time high and the subsequent peaks
We broke above the 200-day Simple Moving Average (SMA)
The current bottom came as a result of a bullish divergence signal
The current rally is potentially unfolding in a five Elliott Wave sequence
200-Day Simple Moving Average
This is the first major breakout of the 200-day SMA since we broke below it in May 2021. While we have two failed attempts to break above the 200-day SMA during 2021, this time around, the breakout is extremely powerful.
Elliott Wave Analysis
Up from the February 24 low wave, I ended at $0.045 high, and the correction in wave II ended at $0.036 low. In the short term, wave III is still in progress and has the potential to peak around the $0.12 resistance zone.
Once we peak in wave III, we can expect a pullback in wave IV, which should give some time to the RSI oscillator to stabilize.
