EOS (EOS/USD) is a market that looks primed to explode.
It established a short-term bottom of $1.55 on December 7, 2018. At that point, the market lost over 93% from its 2018 high of $23.029 on April 29. While this crypto looked dreadful when it recorded its 2018 low on December 7, volume on that day was significantly heavy. This told us that the smart money was accumulating positions in bulk while stopping the bleeding at the same time.
With buyers emerging, EOS entered an accumulation period as it range traded between $1.75 and $3 for over two months. This period ended yesterday when the price decided to trend higher.
Technical analysis shows that EOS took out resistance of $3 on February 18, 2019. This triggered the breakout from range accumulation, which may have likely signalled that the bottom is in. Also, the breakout looks valid. Yesterday, the coin printed volume that’s over 300% of its daily average. This tells us that sentiment has likely shifted from bearish to bullish.
Yesterday’s move, however, pushed EOS to overbought territory. Also, the 200-day moving average is acting as a resistance. These signals indicate that this altcoin is due for a pullback. We’ll take this chance to buy on dips.
The strategy is to buy on the retest of $3. If bulls can stay above this support, they’ll likely gather the momentum to rally to our range midpoint of $4. Take that out and the next target is $5.
The process may take less than a month.
Daily Chart of EOS/US Dollar on Bitfinex
As of this writing, the EOS/US Dollar pair is trading at $3.7441 on Bitfinex.
Summary of Strategy
Buy: As close to $3 as possible.
Targets: $4 and $5.
Disclaimer: The writer owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.
Featured image courtesy of Shutterstock.