EOS looking for a base again
While the cryptocurrency markets have been rather bullish over the last several weeks, EOS hasn’t been any different. In fact, what’s interesting about this market is that it is extraordinarily technically driven. In fact, there are several different things that you can pay attention to on this chart that can give you an idea of where we are going next. In fact, although technical analysis is my forte, the reality is that few charts are as picture-perfect as this one.
One of the most obvious technical factors on this chart is the fact that the red 50 day EMA has offered perfect support since the beginning of March this year. In fact, it’s almost a bit of a trend line that we can pay attention to. We have seen this moving average tested several times, and it has held on each attempt. Much like a trend line, you must assume that it will continue to work, at least until it doesn’t. While that isn’t necessarily the answer a lot of traders want to hear, it’s the reality of how technical analysis works.
Beyond that, the 200 day moving average is just below and we have recently crossed to form the “golden cross” that a lot of longer-term technical traders pay attention to. In other words, longer-term traders now recognize this as being in a significant uptrend. With that in mind, we can look at the technical structure of price action through that prism.
Looking at the chart, you can see quite easily that the six dollars level has offered support several occasions over the last month or so, and it looks as if we can continue to see a lot of buying. That being said, we have recently seen a bit of a spike and now have pulled back to this basing area. If we rally above the $6.50 level, then it looks very likely that we could go towards the $8.00 level. A breakout above there would then send this market looking for the next $2.00 above and the $10.00 level.
To the downside, if we were to break down below both moving averages on the chart, then we will probably unwind towards the $5.00 level. A break down below there opens up the door to the $4.00 level and could even kick off more of a downtrend.
While I do not think that the bearish picture takes over, the reality is that there are always two sides to every story. I believe that as long as the overall crypto markets rally, EOS won’t be any different. As with any other cryptocurrency market, you should pay attention to Bitcoin and what it’s doing. After all, it is the main barometer for how digital currencies will do, as it is by far the biggest market out there, regardless of what you believe about the various other smaller coins out there. They all tend to move in the same direction, so pay attention to the BTC/USD pair, and trade this market accordingly.