Bitfinex increases leverage for Tezos; how will it affect the price of XTZ?

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Bitfinex announced a series of changes for its Tezos trading pairs that are meant to enhance the trading experience of its customers. Despite the significance of the announcement, XTZ continues pulling back after the 190 percent rally it went through since the beginning of the year.

Maximum leverage for Tezos

In a recent blog post, Hong Kong-based cryptocurrency exchange Bitfinex revealed that it will increase leverage for its Tezos trading pairs. Now, users will be able to trade XTZ/USD and XTZ/BTC with a maximum leverage of 3.3x instead of only 2x.

The decision to enable higher leverage for Tezos is due to the interest that market participants have shown for this cryptocurrency, according to Paolo Ardoino, Bitfinexs CTO.

Ardoino said:

[Tezos] is becoming a well established and liquid market on Bitfinex. [Thus, it is] time to switch gears and allow increased leverage to 3.3x.

As of Feb. 17, users will also be able to enjoy a lower initial equity of 30 percent and a lower margin maintenance of 15 percent. Additionally, the XTZ token can now be used as a collateral with a market makers spread or haircut of 30 percent.

The announcement comes at a time when XTZ is going through a retracement, but it could be the catalyst for another upswing.

XTZ technical analysis

On Feb. 14, the TD sequential indicator presented a sell signal in the form of a green nine candlestick on XTZs 1-day chart. This bearish formation estimates a one to four candlestick correction before the continuation of the bullish trend. The recent downturn was able to confirm the sell signal pushing the price of this crypto down over 20 percent.

The downward movement appears to have met a significant level of support around the 61.8 percent Fibonacci retracement level. This barrier served as a rebound zone preventing the price of Tezos from a further decline. Now, XTZ seems to have regained the 78.6 percent Fibonacci retracement level as support.

A daily candlestick close above this price hurdle could signal the continuation of the bullish trend. Tezos could then try to close above the recent high of $3.6. Such a bullish impulse could take investors into a FOMO (fear-of-missing-out) stage. If this happens, XTZ could surge to test the next levels of resistance between $4.24 and $5.

It is worth noti ...

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