Will EOS Break Out Of It’s Recent Range Bound Condition?

EOS, the cryptocurrency giant which had raised over $4 billion in its year long ICO, has experienced a bullish start to the start of the month. Although the currency is down 3.5% over past the 24-hours, it is up 13.50% over the past 7-days.

EOS is swiftly on track to pick up some of the gains lost during the month of May. Price action had fallen a total of 54% from the highs set toward the end of the bullish run in April to the low set at the end of May.

If price action manages to continue on its bullish trajectory we could eventually see it make an attempt at the all time high set in April at $23.02. If we see prices manage to trade above the current all time high during June, then our first upside target is priced at $28.31 and our second upside target is priced at $31.04 to be reached at some time during July or August.

This is not too far away from the prediction of $34 dollars that the world renowned crypto enthusiast, John McAfee, predicted that EOS would be trading by late July.

After the promising reaction to the EOSIO main net launch on June 2nd and with the upcoming token swap looming, we will be closely following price action over the coming weeks to see if any of McAfee’s or our price targets hit.

Let us take a look at the technical side of the market in the analysis below.

XRP/USD PRICE ANALYSIS

LONG TERM – DAILY CHART

eos price chart 2018

Looking at the market from a long term perspective, we can see that EOS has experienced a year of sideways movement as the year opened trading at a price of $7.66 and is currently trading at $13.54.

Although, price for EOS is up on the year, it still below the all time high placed at $23.02. However, EOS has experienced a decent year relative to the rest of the crypto market. Currently EOS is ranked 5 in terms market cap, across the entire cryptocurrency market, holding a total of $12 billion in market cap.

Let’s have a closer look at more recent price action on the daily chart.

SHORT TERM – DAILY CHART

eos price chart 2018 2

Looking at the market from a short term perspective we can see that the downtrend the price had experienced during the start of the year has shown signs of rebounding. During the month of April, we can see that the price of EOS has risen from a low at the start of the month at price of $5.10, to a high of $23.02 set at the end of Apri, an incredible 350% increase in price from low to high.

Since then, prices have rebounded to the .618 Fibonacci Retracement at price $11.17. This Fibonacci Retracement is taken from the bullish run experienced in April. The .618 Fibonacci Ratio is said to be the ‘Golden Mean’ amongst Fibonacci theorist so it is expected to hold a significant amount of support.

The start of the month has seen a significant rise as price action has made its way above the .50 Fibonacci Retracement at price $13.42. We will closely follow price over the following few sessions to see if the support at $13.42 can hold.

For a bullish run to potentially occur, we would need to see price action to make its way and hold above $15.68 which is the .382 Fibonacci Retracement level. From there, price action would be free to go on and test the all time highs at £23.02.

Alternatively, markets could trade sideways in the build up to the token swap coming toward the end of the month. In this scenario, we would expect the market to trade in a sideways manner between the .382 and .618 Fibonacci Retracement levels. Specifically, between $15.68 and $11.17.

The technical indicators are showing some positive signals in favour of the bulls. We can see that RSI has battled its way up above the 50 handle indicating the positive momentum within the market. For a bullish run to continue, we would require the RSI indicator to remain above 50.

Although it may be currently difficult to see on the chart above, the 7-day EMA and the 21 day EMA have crossed above one another indicating the growing bullish momentum within the market. If we see these two momentum indicators begin to pull away from one another, then we will be experiencing a bullish rally.

SHORT TERM – 4-HOUR CHART

eos price chart 2018 3

Takin an even deeper dive into price action, we can see that EOS has returned some of the gains seen earlier during the month. Over the short term, price has already retraced all the way up to the .50 Fibonacci Retracement priced at $12.93. This is a Fibonacci Retracement taken from the lows of May to the highs seen in June.

Since then, price has found its away above the .382 Fibonacci Retracement at $13.55 and is currently finding support at this level. For a bullish run to continue we firstly would like to see price break through near term resistance at $14.20. After this price action can go on to test the highs set out at the start of this month.

Alternatively, if price action fails to hold above near term support and falls below $12.93, then we could expect more short term bearish pressure as prices head toward the short term .618 Fibonacci Retracement at $12.32.

The technical indicators are not showing too many promising signs for the bulls in the short term. The RSI indicator is struggling to stay above 50 at it currently battles its way on up above the level. For bullish momentum within the market, we would like to see it hold above the 50 level. The short term moving averages are not providing too much information also as to which direction they wish to move toward next.

CONCLUSIONS

Relative to the rest of the crypto market, EOS has experienced a good year against the USD as it currently trades higher than its yearly opening price.

After a long wait, the EOS mainnet has launched and so begins an important time to watch the market closely. As the token migration closes in we will be monitoring price action to see if it shows any further signs at to which direction it wishes to travel next.

– Yasin Sheikh

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