EOS could climb higher, but is there demand
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.
- EOS has a bearish market structure and was unable to break above $0.64.
- A slow move higher to a Fibonacci retracement level before the continuation of the higher timeframe downtrend was a possibility.
EOS gained regulatory approval in Japan last week, which led to a surge of positive short-term sentiment in the market. Given that Japan has a strict financial regulatory framework, the network’s efforts to be compliant with its regulations boded well for long-term holders.
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The price chart saw a price jump on 29 August and 30 August, but from a technical standpoint, the structure did not favor the buyers. Even so, a bounce was possible.
The downtrend could begin anew after a move to these resistance levels
While long-term investors could be in for a prolonged wait for a true bull run, traders could expect to see reasonable gains in the coming weeks. EOS was trading at $0.589, and its bounce in late August was unable to breach the local resistance at $0.644.
The Fibonacci retracement levels were plotted for the losses since July. They showed that the 50% and 61.8% Fibonacci retracement levels sat at $0.676 and $0.714 respectively. A retest the $0.714 would be ideal before another drop, and has occurred recently.
The rejection from $0.815 in mid-July was from the 61.8% retracement level of the previous drop. The RSI continued to show a downtrend in progress, while the OBV has not beaten the highs from July yet.
Order books showed substantial support at the $0.56-$0.58 region
MobChart data showed plenty of limit buy orders just below where EOS was trading at. They amounted to close to $600k worth of buy orders, while a $287k sell wall sat at the $0.6 mark.
Realistic or not, here’s EOS market cap in BTC’s terms
Over the past week, the market sentiment shifted bullishly when the prices bounced to reach $0.64 on 29 August. The OI surged higher but retraced all those gains as the market slumped toward $0.58 again.
Aggressive swing traders can look to buy EOS around the $0.6 mark, with a tight stop-loss around the $0.55 level. The bullish target would be the $0.67 and $0.71 levels- but a bearish reversal was likely thereafter. Alternatively, a move below $0.55 could trigger losses as well.