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

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.

In a recent blog post, Hong Kong-based cryptocurrency exchange Bitfinex revealed that it will increase leverage for its Tezos trading pairs.

The XTZ token can now be used as a collateral with a market maker's spread or haircut of 30 percent.

The recent downturn was able to confirm the sell signal pushing the price of this crypto down over 20 percent.

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.

If this happens, XTZ could surge to test the next levels of resistance between $4.24 and $5. It is worth noting that the substantial bullish impulse that Tezos has seen since the beginning of 2020 suggests that a steeper correction could take place.

On its way down, Tezos could find support around the 50 or 31.8 percent Fibonacci retracement level.

Thus, the increment in leverage by Bitfinex could significantly expand the amount of buying orders behind Tezos.