ZIL, the utility token of permissionless blockchain Zilliqa, has lost 37.29% of its value this year. Holders may be hoping for a recovery, but analysis suggests the decline is likely to continue for some time.
In March, the token reached a yearly high of $0.040, but revisiting this area may be difficult, and here’s why:
Zilliqa Bears Maintain Dominance Despite Rising Attention
At the time of writing, ZIL is priced at $0.016. It is trading below the 20 EMA on the daily chart. EMA stands for Exponential Moving Average, a technical indicator that tracks the price changes of an asset over a period of time.
Simply put, when the cryptocurrency price is above the EMA, the trend is bullish. Conversely, when the price falls below the EMA, the trend is bearish. The ZIL/USD chart shows that the price stayed above the 20 EMA until July 30.
The position at the time improved hopes for recovery. Now that it is below that, those hopes may have been dashed as ZIL continues its downward trend.
Read more: Zilliqa (ZIL) Staking: A Step-by-Step Guide for Beginners
Despite the decline, Zilliqa’s social dominance has skyrocketed. The social dominance metric compares the speed of discussion about a cryptocurrency to that of other projects.
An increase in social dominance means that a cryptocurrency is getting a lot of media attention. On the other hand, a decrease means that other cryptocurrencies are getting more recognition.
So the current situation of ZIL is consistent with the increase in messages and posts related to it. ZIL may be receiving relatively good market interest, but this does not prove a price increase.
ZIL Price Forecast: Further revisions to come
A further evaluation of ZIL’s price action shows that the token may experience consolidation over time. One of the rationales for this thesis is the Awesome Oscillator (AO). The AO compares long-term and short-term price movements of cryptocurrencies to determine momentum.
When the indicator is above the midpoint, it means that the momentum is rising. However, when the reading is in the red zone, it means that the downside momentum is increasing. The latter is the case for ZIL, especially when the histogram bars are red.
ZIL may also struggle to break out of the downtrend. If selling pressure increases, the price may fall to $0.015. If this point is not defended, a correction to $0.012 is possible, especially if the Bitcoin (BTC) price continues to fall.
Read more: Zilliqa (ZIL) Price Prediction 2024/2025/2030
However, if buying pressure increases, the token may not reach this target, in which case the price of ZIL may drop to $0.17.
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