Chiliz (CHZ) continues to break out despite overbought warnings from on-chain data

Chiliz (CHZ) increased by more than 8% to $0.054 during Tuesday’s trading session, extending the strong recovery initiated in mid-December. The new developments in the ecosystem, notably the launch of Fan Token and Locker Room, have sparked investor interest, pushing CHZ’s market capitalization above $550 million. However, while the bullish trend remains dominant, traders should not be complacent, as on-chain data is sending some warning signals, indicating that short-term growth potential may be limited.

Fan Token and Locker Room Drive CHZ Demand

Chiliz is accelerating the expansion of its Fan Token ecosystem as the FIFA 2026 World Cup approaches. On X on Tuesday, CHZ announced that Socios has signed a partnership with another national football team to prepare for the launch of a new Fan Token, following successful deployments with Argentina, Portugal, and Italy, bringing the total number of national teams to four. Meanwhile, active engagement in “Locker Room” remains steady, further strengthening the community base and the value of the Chiliz ecosystem.

This series of positive news has helped activate market demand, pushing CHZ’s market cap beyond $550 million, according to data from CoinGecko.

Source: CoinGecko

Some Concerning Signs

Although CHZ’s price rally appears impressive, aggregated data from CryptoQuant signals some pessimism. Specifically, both the spot and derivatives markets are showing signs of increased selling pressure from retail investors, along with signs of overheating. These factors suggest that the risk of correction is gradually emerging in the short term, prompting the market to be more cautious about a potential reversal.

Source: CryptoQuant

Chiliz Price Forecast: CHZ Bulls Target Above $0.060

The Chiliz price broke out and closed firmly above the previous resistance zone at $0.039 on December 30, triggering a strong rally of nearly 30% over the next 11 days. However, the upward momentum temporarily stalled as CHZ faced slight resistance at the next daily resistance level around $0.051 on Sunday, leading to a short-term correction. By Tuesday, the altcoin quickly regained momentum, rising over 8% and surpassing the key resistance zone.

In a positive scenario, if the current bullish trend continues, CHZ’s recovery is likely to persist and target the next weekly resistance zone around $0.063.

Daily CHZ/USDT Chart | Source: TradingView

Technical indicators continue to support the bullish outlook. Specifically, the daily RSI is oscillating above the overbought threshold of 70, reflecting strong market momentum. Meanwhile, the MACD has formed a bullish crossover, further reinforcing the optimistic scenario.

Conversely, if increased profit-taking pressure causes CHZ to correct, the price could retreat to test the important support zone around the $0.039 level.