Tezos testing six-month lows after a 40% weekly dip

Tezos (XTZ/USD) has been on a losing streak over the past week. While the coin has attempted to bounce off critical support levels, the downtrend across the broader market has failed to aid in recovery.

Selloffs continue to be recorded across the cryptocurrency market. During the past 24 hours, the global market capitalization has dropped by another 8% to reach $1.52 trillion, according to CoinMarketCap.

Tezos support at $2.50

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If XTZ continues with the bearish trend, the $2.50 support level is likely. The token has been on a downtrend since the beginning of the month, and this could persist for the next week. Reaching $2.30 is also likely, given that selloffs are likely to be recorded until the market cools off.

Dropping to $2.30 will bring Tezos to a six-month low. These levels were last achieved in July 2021, and if there is a lack of buyer support from short-term traders, new lows could be formed. In just 24 hours, XTZ has dipped from $3.12 to $2.60, which shows the strength of the bear market.

Any recovery by Tezos depends on support from the broader market. At this point, the market is still shedding value, and with the fear index signalling more selloffs, XTZ’s recovery might not happen soon.

Tezos downtrend could reach exhaustion

On the upside, a recovery in XTZ’s prices could also be on the way. An over 10% bull run is possible if buyers buy during the current dip. However, the hope of recovery will come from signs of gains across the broader cryptocurrency market.

A recovery will push XTZ towards the next major resistance at $2.85. The coin has attempted a recovery past this resistance level in the past, but the bounce has been met with strong market resistance. If it holds this level and manages to break through, the next target will be $3 and above. A peak at $3.62 could also be achieved with buyer support. With XTZ being around 71% below its all-time high, bulls need to be strong enough to enable the token to make significant gains.