EOS continues to struggle
When it comes to the crypto markets, one thing is a constant: if Bitcoin breaks down, the rest of the crypto market falls apart. EOS is no different, and when I look at this chart I can see just how decimated this market has been. At this point, only the “true believers” are stepping in to pick up EOS.
EOS breaks major support
The EOS market has broken through a large, round, psychologically significant figure in the form of $4.00, as well as the 61.8% Fibonacci retracement level. From a technical analysis standpoint, this is a horrific development and it suggests that the market is all but done. Beyond that, we are starting to see the first signs of a potential “death cross”, when the 50 day EMA crosses below the 200 day EMA. This is a long-term bearish signal, and that of course could be the beginning of something rather nasty.
Looking for support, again.
EOS is now going to be looking for support at lower levels. The question now is whether or not we will find it? Obviously it can’t go down forever but there are a couple of likely candidates that could come into play. The initial one of course is the $3.00 level, which has a certain amount of psychological support attached to it. However, as a general rule when the market break below the 61.8% Fibonacci retracement level, they quite often will wipe out the entirety of the move. If that’s going to be the case, the $3.00 level will hold and we should then go down to the $2.00 level after that.
Ultimately, we need Bitcoin to save this market
The cryptocurrency world follows Bitcoin, plain and simple. We need Bitcoin to make its move to the upside with conviction in order for some of the smaller coins such as EOS to turn around. I do think this happens eventually, but in the meantime EOS could see a pretty significant drop. That being said, somewhere closer to the $2.00 level we may have the ability to pick up the currency “on the cheap”, therefore we have an opportunity for a longer-term investment. The question is whether or not you have the ability to hang on? I do think this will offer a nice opportunity given enough time, you may want to scale into your position slowly.
The trade going forward
The trade going forward in this market is to simply build a position over time between the $3.00 level and the $2.00 level below. Because EOS is so cheap, you can amass quite a bit in bits and pieces in that general vicinity. Keep in mind that this is a longer-term set up, and it’s not one that will reward you right away, but when you see an asset drop like this, it’s those who come in and pick it up to hold on for the longer-term that typically make the most money. It’s the same whether it stocks, bonds, currencies, or even cryptocurrency.