The price of Chiliz (CHZ) has surged by approximately 35% this week to reach $0.26. This follows CHZ price jump last week on the Pequin Scoville Testnet update news. Chiliz price has outperformed Bitcoin (BTC) and Ether (ETH) this week, which have been wobbling over the same period. CHZ has not seen this price level since April.
Here are the key factors that could be behind the Chiliz breakaway rally.
Chiliz Chain 2.0
On Aug. 22nd, Chiliz founder Alexandre Dreyfus announced their intention to stop utilizing the Ethereum blockchain to launch their fungible and nonfungible tokens and replace it with its own native chain, CHZ 2.0.
“We don’t have to rely forever only on ERC20 or ERC721 equivalent,” said Dreyfus, adding:
“At @chiliz we think we can bring some innovation on top of fungible token formats. As we work with 100+ of the biggest brands in the world, it is easier to deploy and scale.”
The announcement coincided with CHZ undergoing a 19% intraday price rally on Aug. 22nd, accompanied by a spike in trading volume. From a technical perspective, the move showed traders’ conviction in the CHZ 2.0 announcement.
Chiliz Whales are back
CHZ’s price boom this week further coincided with the rise in whale activities.
Of particular note, the number of CHZ transactions whose value exceeds $100,000 reached 105 on Aug. 23rd, its highest since March 29th, according to data provided by Santiment. Moreover, CHZ’s price rallied nearly 12.5% on the same day.
The parallel rise in CHZ’s whale activity, volume and price suggest that most rich investors have been buying the token after the CHZ 2.0 announcement.
CHZ Cup and Handle Reversal
Chiliz’s ongoing price rally comes as a part of a technical breakout move that started in mid-August.
On the daily chart, CHZ broke out of its prevailing cup and handle pattern on Aug. 14th after closing above the pattern’s neckline range (the red bar), as shown below. A cup and handle pattern is considered a bullish reversal setup by traditional chart analysts.
This technical setup, along with the CHZ 2.0 announcement, could have influenced traders to remain bullish on CHZ. It could also mean that the token may keep rallying until it hits the cup and handle pattern’s profit target at around $0.32, up another 35% from August’s price.
The target is determined by measuring the cup and handle’s maximum height and adding the outcome to the neckline. In other words, CHZ price could reach it by September, giving it current upside momentum.
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