Chiliz Tumbled 13% Owing to Withdrawal Glitches—But Bulls Are Still on Track

Key Insights

• ChilizX experienced withdrawal glitches on Monday this week, causing CHZ to plunge 13%.
• Customers panicked and sold CHZ, contributing to the double-digit losses within 24 hours.
• Despite the technical issues, the long-term outlook for CHZ remains positive.
• The $0.094 price level is crucial, as a break below could lead to a decline.
• Conversely, holding above $0.094 could trigger a 53% rally to $0.142.

Something very strange happened this week, on ChilizX, a crypto exchange, made specially for people who want to trade fan tokens.

Shortly after this happened, the CHZ, the native cryptocurrency of the Chiliz ecosystem started to decline heavily.

In less than 24 hours, the cryptocurrency was already registering double-digit losses.

However, despite the issues with Chiliz and ChilizX, the bullish outlook on CHZ remains valid, as we will soon see.

ChlizX Hits A Stone Wall

This week on 24 January, ChinizX announced on Twitter (X) that it was experiencing a "withdrawal issue".

In particular, the withdrawal issue affected the Chiliz Legacy Chain network, the original blockchain network of the Chiliz ecosystem.

Without providing any details as to why this happened, or what was being done to fix things, the ChilizX Twitter account asked its customers to use the new Chiliz Chain (CC2) network instead, for withdrawing their fan tokens.

Furthermore, ChilizX also warned users to not withdraw their fan tokens from the newer CC2 network to the older one, as this could result in a loss of funds.

To top things off, ChilizX ended the cryptic announcement with some "reassurance" that it was "working to resolve" the issues with the chain as soon as possible.

Customers Revolt And Panic Sell CHZ

The ChilizX customers were simply not having it.

Many CHZ holders entered panic mode and started to sell CHX massively, causing a drop of more than 12.5% in a matter of hours.

This decline also brought the cryptocurrency into a break below the $0.1 mark, making CHZ one of Monday's worst performers this week.

In fact, despite the recovery of the cryptocurrency so far, CoinMarketCap data shows that it still has more than an 11% decline to contend with on the weekly timeframe.

So far, some users have reported that they were able to withdraw their tokens through the older Chiliz Legacy Chain network on other crypto exchanges like Binance and Huobi, without any issues.

However, there is also some speculation about whether Monday's bitter decline was a genuine technical issue, or whether it was an attempt to manipulate the market.

Chiliz Is Still On Track

The chart below shows Chiliz from a weekly perspective.

The outlook in the chart shows that after Chiliz's heavy decline from around $0.9 at the height of the previous bull run, the cryptocurrency bottomed out at the base of a descending wedge.

Chiliz has been trying ever since, to rally from here and rally upwards on the long-term perspective.

Zooming into the daily chart, however, we can see that over the medium term, Chiliz is trading on top of an ascending trendline, and is therefore overall bullish.

The cryptocurrency broke above the $0.094 resistance after forming a double top against it, on 16 January.

Monday's decline turns out to have been a necessary one and is part of a larger consolidation on the cryptocurrency above this price level.

This means that the key price level to keep an eye out for would be the $0.094 zone because this is the only thing keeping CHZ from a larger decline towards the ascending trendline.

If the $0.094 zone remains unbroken from here, we can even expect a possible 53% rally to the next resistance at $0.142, as shown above.

Disclaimer: Voice of Crypto aims to deliver accurate and up-to-date information, but it will not be responsible for any missing facts or inaccurate information. Cryptocurrencies are highly volatile financial assets, so research and make your own financial decisions.