After a stellar first half of 2019, EOS has been under the tight grip of the bears. From a 2019 high of $8.6503 in June, the cryptocurrency has plunged all the way down to $3.06 by the end of August. That’s a massive devaluation of close to 65 percent in about three months.
The sharp correction is giving some traders more reason to doubt that a recovery is in sight. A pseudonymous account named CryptoDude shared on Twitter a bearish analysis of the coin.
All of the majors USD pairs look terrible. Bearish retests and most likely continuation consolidations.
— CryptoDude (@cryptodude999) August 27, 2019
The good news is that the steep decline over the last few months has left bears in a state of exhaustion. We are starting to see signals that EOS could rally soon.
Bulls Plotting an Insurrection
The brutal downtrend in the last few months has driven EOS to a point where bulls can make a strong stand.
A look at the daily chart shows that the coin is trading near support of $3.00. This is a key level for the cryptocurrency because early this year, bulls struggled to take out this price. After breaching this area, the bulls pulled off a monster rally that sent EOS to its 2019 high.
It is also important to note that this level has not been retested as support. Thus, we believe that demand at $3.00 is still strong.
In addition, technical indicators support our view that a bounce is on the horizon. We can see the daily RSI printing a bullish divergence to suggest that bulls are gaining momentum. The swing in momentum is affirmed by the MACD cross. So far, we have solid signals that could attract bottom pickers.
Analyst: EOS ‘Still Facing Some Resistance’
While technicals suggest a bounce, Ian McMillan, CMT, an analyst in the RIA industry, believes that EOS must clear some hurdles before it can muster a significant rally. Speaking to CCN, the trader noted:
“Based on recent support/resistance, needs to get above $3.50-3.55 (into the blue circle) before I could expect it to move higher. Also still facing some resistance from this overhead trend line.”
For bottom pickers, a good buy area could be close to support of $3.00. Breakout traders, on the other hand, might want to stick to Mr. McMillan’s plan and buy above $3.50. Targets to consider are $4.00 and $5.00.
Disclaimer: The views expressed in this op-ed are solely those of the author and do not represent those of, nor should they be attributed to, CCN Markets.