Chiliz: Setting Up For A Bullish 2023

Summary CHZ has strongly outperformed BTC and ETH, up 70% from the June 2022 low. Chiliz operates Socios.com where fans can buy Fan Tokens to interact with their favorite teams. Fan Tokens have done over $100 billion in sales volume. Produced in collaboration with Avi Gilburt and Ryan Wilday This past summer, we published a series entitled “3 Alts With Setups for Higher Highs In the Next Bull Cycle in Crypto,” linked below: 3 Alts With Setups For Higher Highs (Binance Coin) (Cryptocurrency:BNB-USD) 3 Alts With Setups For Higher Highs (Part 2, Matic/Polygon) (Private:MATIC) 3 Alts With Setups For The Next Crypto Bull Cycle (Part 3, Aave) (Cryptocurrency:AAVE-USD) While crypto has yet to take off clearly in the next bull cycle, Binance and Matic have held up particularly well amidst the deeper declines and collapse of FTX that has rocked the crypto world. Specifically (as of writing), BNB is down 1.67% from the respective aforementioned article’s publication and MATIC is up a whopping 74.4%. AAVE, on the other hand, has not held up so well (down 36% from publication), and the larger thesis presented in the August article has certainly become questionable. In this article today, we will present Chiliz (CHZ-USD). Among all of the cryptos we have tracked in 2022, this coin has been one of the top performers and it appears to be one of the best prospects for 2022. CHZ has strongly outperformed BTC (BTC-USED) and ETH since its 2022 low struck in June. As of writing, CHZ is up roughly 70% as compared to BTC which is down about 3% and ETH up 42% over the same period. Chiliz describes itself as “The world’s leading blockchain fintech provider for sports and entertainment.” CHZ is a utility token for use in the Socios.com ecosystem to connect sports fans with their favorite teams. CHZ can be used for the acquisition of Fan Tokens that have a range of use, from accessing VIP rewards and exclusive promotions, to participation in games and chat forums. Socios and Chiliz offer a whole new means for sports teams, leagues, and entertainment companies to monetize a variety of novel offerings. The adoption to Chiliz has been large, as Socios has partnership deals with several dozen professional sports teams globally. And regarding fan participation, Fan Tokens have done over $100Billion in sales volume. source: Fan Token Global Sales Volume Index / CryptoSlam! “Socios has made fan tokens for some of the world’s biggest soccer teams, including FC Barcelona, Arsenal, Paris Saint-Germain, AC Milan, and Juventus, in which token owners get exclusive access to rewards and in-person experiences.” ( here ) From a technical perspective CHZ Daily Chart CHZ Daily Chart (Jason Appel (Crypto Waves)) CHZ has a potential large degree Impulse forming from its 2019 low. As per Elliott Wave Theory, an Impulse is a 5 wave trending move in which waves 1, 3, and 5 advance price in the direction of the trend, and are themselves composed of their own smaller-degree 5 wave moves. Waves 2 and 4 correct or consolidate a portion of the previous wave’s advance. Wave 3 is typically the longest wave, and if not the longest, it must not be the shortest of waves 1, 3, and 5. Also, the wave 4 retrace of wave 3 cannot overlap into wave 1 territory. In practical application of Elliott Wave, it’s quite important that wave 4 does not make a sustained retracement of more than 50% of wave 3. While a prolonged break beneath the 50% retrace does not constitute an invalidation of the impulsive potential, it often is early warning as once the 50% retrace is broken, upside follow through loses reasonable reliability. Let’s review the price action and wave structures for CHZ from the 2019 low: CHZ 2019-2021 Chart (Jason Appel (Crypto Waves)) CHZ 2019-2021 There’s an initial 5 wave Impulse as a very vertical rally (when viewed on the daily candlestick timeframe) into the November 2019 high, wave (1). This was followed by a very protracted and deep pullback into the March 2020 low, wave (2). And while the March low came very close to the 2019 low, CHZ did manage to hold a higher low in price for a valid (2). From the March 2020 low, a huge rally developed with a very vertical final portion in the last week of the rally into all time highs during early March 2021. Regarding the subwave count of wave (3) shown in the 2019-2021 chart: One important aspect of Elliott Wave to note is that, as an analysis tool, if properly applied, it provides probabilistic predictions for movements in price. It does not, however, provide reliable timing perspectives. This is particularly salient on this chart’s wave (3), in which CHZ developed very sufficient extensions in the subwaves of (3) with regard to price, but with such vertical moves that did not offer any pullbacks, the individual subwave structures are quite condensed in time. As mentioned before, a wave (4) within an impulse ideally needs to maintain above the 50% retrace of wave (3). The 2022 low, struck in June, certainly satisfied that condition, bottoming just a bit beneath the 38.2% standard wave (4) retrace. However, this is insufficient for a confident perspective that price will recover and turn up once more for a higher high in wave (5). In order for additional confidence that the selloff is in hindsight, price needs an initial 5 waves up sufficient in size for wave 1 of (5). Unlike many cryptos which just have spiraled down from their 2021 all-time highs, CHZ has struck a bottom (at least an interim bottom) above the 50% retrace of (3) and has subsequently produced a clear 5 wave rally. After an initial 5 up for a wave 1, expectations are for wave 2 to produce a corrective pullback to retrace between 38.2%-61.8% of the preceding rally. This range, known as our standard wave 2 support region, is between $0.13-$0.175 on CHZ. CHZ June-Dec 2022 (Jason Appel (Crypto Waves)) CHZ June-December 2022 The standard wave 2 support region is an attractive region for long entries to accumulate positions, as it offers a clearly defined setup with maximal risk/reward within an overall sound technical thesis. At the micro level, this pullback appears to be very full within its smaller degree wave structure, which suggests that the downside is nearing potential completion. So long as price is maintaining above the .618 retrace, $0.13 the upside potential as displayed remains a confident setup. While technically valid, a sustained break below the .618 retrace starts to raise questions about the primary thesis, and below the .764 retrace, roughly $0.10 will start to favor the potential of invalidation of the thesis. Official invalidation comes with a break beneath the June low, roughly $0.08. Initial resistance to the upside is $0.175, and exceeding that level provides initial evidence of a potential low in place for wave 2. Larger resistance to the upside is $0.33 (the March 2022 high), and once that is resoundingly cleared (assuming that occurs), we will have strong confidence of price heading up to the larger Fibonacci target region for wave (5), which is $1.30+. Considering price currently in wave 2 standard Fibonacci support (at $0.1495 as of writing), the overall setup and risk/reward offers an attractive entry opportunity here for those inclined towards the upside thesis.