Chiliz poised for a 20% rally following retest of major support level

• Chiliz price retests weekly support around $0.053 and bounces 5%, trading at $0.067 on Monday.
• Network Realized Profit/Loss metric shows CHZ’s capitulation events on July 5 and July 8.
• On-chain data shows that CHZ dormant wallets are active and exchange supply is decreasing, signaling bullish outlook.
• A weekly candlestick close below $0.053 would invalidate the bullish thesis.

Chiliz (CHZ) price tested the weekly support level around $0.053 and rebounded by 5%, reaching $0.067 on Monday. On-chain analysis indicates recent capitulation events on July 5 and July 8, increased activity from dormant wallets, and a declining supply on exchanges, all suggesting bullish sentiment that may drive a rally in CHZ price in the days ahead.

Chiliz price shows potential for an upside rally

Chiliz price retests the weekly support around $0.053 and bounces 5%, trading at $0.067 on Monday.

If this support level holds, CHZ could rally 20% to retest the weekly high of $0.0806 from June 24.

The Relative Strength Index (RSI) and the Awesome Oscillator (AO) on the weekly chart are trading below the neutral thresholds of 50 and zero, respectively. For bulls to sustain momentum, both indicators must rise above these critical levels, potentially supporting the ongoing recovery rally.

If the bulls are aggressive and the overall crypto market outlook is positive, if CHZ closes above $0.080, it could extend an additional 36% rally to retest its 50% price retracement between $0.165 and $0.054 at $0.109.

CHZ/USDT weekly chart

On-chain data provider Santiment’s Network Realized Profit/Loss (NPL) indicator computes a daily network-level Return On Investment (ROI) based on the coin’s on-chain transaction volume. Simply put, it is used to measure market pain. Strong spikes in a coin’s NPL indicate that its holders are, on average, selling their bags at a significant profit. On the other hand, strong dips imply that the coin’s holders are, on average, realizing losses, suggesting panic sell-offs and investor capitulation. 

In CHZ’s case, the NPL indicator dipped  -264,940 and -12.82 million from July 4 to July 5 and -55,664 and -6.57 million from July 7 to July 8, coinciding with a 12% and 7% price crash, respectively. This negative downtick indicates that the holders were, on average, realizing losses.

During this capitulation event, CHZ’s supply on exchanges declined from 964.13 million to 928.29 million in four days. This decrease in supply on exchanges indicates that investors are moving CHZ tokens to wallets and reducing selling activity, signaling a bullish outlook and further denoting investor confidence in Chiliz.

CHZ Network Realized Profit/Loss and Supply on Exchanges chart

Santiment’s Age Consumed index aligns with the bullish outlook noted from a technical perspective. The spikes in this index suggest dormant tokens (tokens stored in wallets for a long time) are in motion and can be used to spot short-term local tops or bottoms.

For CHZ, history shows that the spikes were followed by a rise in the Chiliz’s price. The most recent uptick on July 8 also forecasted that CHZ  is ready for an uptrend.

CHZ  Age Consumed chart

Even though on-chain metrics and technical analysis point to a bullish outlook, if CHZ's price makes a weekly candlestick close below $0.053, the bullish thesis would be invalidated by creating a lower low on the weekly chart. This development could see CHZ's price decline by 6% to retest its next weekly support at $ $0.050.