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Chiliz (CHZ) price has stagnated around the $0.12 mark since April 26. On-chain data shows that the inability to attract new demand has resulted in a disproportionate increase in active sell-orders on exchange. How much price downswing can CHZ holders expect?
CHZ is the native cryptocurrency of the Chiliz blockchain, which powers the Socios sports and entertainment platform.
Most fan tokens issued on the Chiliz blockchain are affiliated with European football clubs. With the European football season closing in May 2023, new investors are hesitating to join the Socios ecosystem.
Here is how that could impact CHZ price in the coming weeks.
Chiliz Fans Are Growing Cold Feet
Chiliz (CHZ) is used as a means of payment within the Socios platform. It allows fans to purchase fan tokens that grant them access to various rewards and exclusive privileges. With the current football season entering a hiatus at the end of May, CHZ is struggling to attract new fans.
The number of new participants joining the Chiliz network has been in a steep decline since early April, according to on-chain data rendered by Santiment. The chart below illustrates how Chiliz Network Growth has dropped 61%, from 319 to 124 new wallet addresses, between April 8 and May 2.
Network growth tracks the number of new wallet addresses created on a blockchain network. When it drops persistently, as seen above, it indicates new users are growing hesitant to join the network.
This could be attributed to dwindling fan interest as the services and privileges offered on the Socios ecosystem may not be in demand over the coming weeks.
Current Holders Are Looking To Sell
On a more bearish note, the lopsided order books of exchanges show that the volume of CHZ sell-orders has outpaced buy orders. Currently, sellers have placed active orders to sell 56 million CHZ coins. Meanwhile, buyers are only requesting 46 million CHZ around the current prices.
The Exchange Market Depth chart outlines the number of buy orders and sell orders currently listed by traders across various crypto exchanges. With an excess supply of over 10 million coins, sellers may have to lower prices as they compete to get their orders filled.
In conclusion, the bearish combination of a decline in new users and excess market supply means that CHZ is likely to experience some price downswing in the coming days.
CHZ Price Prediction: The Bears Could Force A Move to $0.10
A critical analysis of the In/Out of the Money Around Price (IOMAP) data compiled by IntoTheBlock suggests that Chiliz price will likely drop to $0.10. But first, the bears will have to contend with 2,650 bullish investors that bought 216 million coins for an average price of $0.12.
If CHZ price drops below $0.12 as expected, holders can anticipate further losses until it reaches the next significant support level at $0.10
Conversely, the bulls could invalidate this negative outlook if CHZ price can break above $0.13. However, sell-pressure from 1,700 investors that bought 414 million coins around this price will likely prevent this.
If the price can scale that sell wall, Chiliz may experience an unlikely rally toward $0.14.