EOS price tumbled during the past few weeks and declined by more than $10.00. It is now reaching an important support area near $3.50-4.00 where buyers could take a stand.
- EOS started a major bearish wave after topping at $23.20 in April 2018.
- There is a declining channel in place with resistance at $6.10 on the daily chart.
- Buyers need to keep a close watch on the $3.50-4.00 support zone for a possible reaction.
EOS price analysis
During the past weeks, we saw a major downward move in EOS from well above the $15.00 level. The price trimmed most of it’s this year gains and declined below the $10.00 support.
The daily chart of EOS/USD indicates that the price cleared the 76.4% Fibonacci retracement level of the ride from the $3.96 low to $23.22 high, opening the doors for a complete test of $3.96.
The price is now well below the $8.50 pivot level and the 50-day simple moving average, which is a strong bearish sign. More importantly, the price is following a declining channel in place with resistance at $6.10 on the daily chart.
However, the price is now approaching a crucial support zone near $3.50-4.00, which is the base for the last major ride from of more than $15.00. Therefore, there are high chances of buyers taking a stand near the $3.50-4.00 zone.
In the worst case scenario, there could be a nasty spike below the $3.50 support zone before the price stages a recovery. On the upside, a break above the channel support at $6.10 is needed for a decent recovery.
Above the channel resistance, the 50-day SMA is positioned at $8.00 to act as a major barrier. If EOS buyers succeed in pushing the price back above $8.00-8.50, it will most likely move into a bullish zone.
In the short term, the price may well decline further towards $3.50-3.90 since the market sentiment is very bearish. However, in the medium term, EOS is reaching important supports and buy levels above $3.00. The daily RSI for EOS/USD is near levels (20) not seen during the past few months, indicating a strong oversold condition.
Aayush is a Senior Forex, Cryptocurrencies and Financial Market Strategist with a background in IT and financial markets. He specialises in market strategies and technical analysis and has spent over a decade as a financial markets contributor and observer. He possesses strong technical analytical skills and is well known for his entertaining and informative analysis of the currency, commodities, Bitcoin and Ethereum markets. Tou can follow him on twitter at @aayushJS or reach out to him at aayush[at]coingape.com