Bitcoin was at the front and center of yet another correction in the altcoin market after the market leader declined towards $35,000. Alts such as EOS, Synthetix, and Compound met with additional selling pressure and looked to revisit levels last seen in January.
EOS
Source: EOS/USD, TradingView
At the time of writing, the market’s bears were attempting to penetrate a strong defensive line at $4.56 – An area that was in focus during EOS’s double-top formation and subsequent breakdown towards $3.57 in late February. In fact, EOS was under the threat of a similar result in case of a southbound move. Such an outcome would amplify losses by another 25% when calculated from the press time price point.
While the presence of a demand zone between $3.5-$4 could alleviate some losses, a sharper sell-off would see a retest of January’s low of $2.4.
The OBV’s downtrend suggested that sellers have largely dominated the market post the 19 May crash, even though EOS’s bull run towards $7.50 did provided some temporary relief. Since the crash, the RSI has hovered around 50, but it slipped into bearish territory over the past week.
Synthetix [SNX]
Source: SNX/USD, TradingView
While the formation of an up-channel presented chances of a breakout, bears were relentless in the Synthetix market as yet another defensive line succumbed to selling pressure. The latest casualty was the $8.65-support- a region that triggered a 50% hike in early January. The next zone of defense lay between the December 2020 levels of $5.6 and $6.5
The RSI visited the oversold zone for the second time in just four days. While a reversal was in order, it was doubtful whether SNX could flip $8.65 back to support considering the build-up of selling pressure on the Awesome Oscillator.
Compound [COMP]
Source: COMP/USD, TradingView
At press time, Compound was trading within its demand zone of $273-$293 and two scenarios were possible moving forward. Successfully defending its channel from a breakdown would result in some sideways movement, with $331.4 forming an upper ceiling. Conversely, a breakdown could trigger another 25% decline towards January levels of $200.
Since the RSI highlighted oversold conditions, a pullback was possible as bulls looked to avoid an extended sell-off. Further, conviction was provided by the CMF’s trajectory as capital inflows headed back into the COMP market.
