The fight between bulls and bears has reached a stalemate these last few days. EOS has been consolidating with no clear direction. EOS has faired well the past couple days, considering most altcoins have dropped rather significantly. This suggests people want to buy EOS, but are timid due to overall market weakness. As the main-net launch rapidly approaches, it's going to be interesting to watch investors reaction.
Looking at the big picture, we can see EOS temporarily droped below the 0.618 fib level (golden ratio), then quickly recovered. It has since been consolidating within between the 0.618 and 0.65 fib levels (golden pocket). Should it drop below this area again, we may be in for a more significant downtrend.
If EOS does break below, I believe that would validate the bearish scenario I outlined a couple days ago. This count has EOS in 5 waves down, with wave 5 yet to begin. A logical target for this 5th wave would be approximately $8.28. There's a decent support zone between $11.72 and $10.50. If EOS breaks below, here's how it may play out:
The bullish scenario has EOS having completed an ABCDE correction, and currently on 5 waves up. I've highlighted the sub-waves in yellow. If this count is correct, the target for primary wave 1 is approximately $16.40. Here's how it may look:
Looking at the 4 hour MACD, we can see bearish divergence. This may indicate a drop is coming.
The 8 day EMA just crossed below the 21 day EMA. This is a rather bearish sign as well.
If you're unfamiliar with how to use EMA's, reference my post on the topic here: https://steemit.com/cryptocurrency/@workin2005/simple-effective-strategy-to-buying-and-selling-market-trends
The bollinger bands have bottlenecked tightly...a symptom of the stalemate between the bulls and bears I alluded to earlier.
The 4 hour RSI has been about as neutral as I've ever seen it for the past couple days.
We may see some continued consolidation if bitcoin continues to move relatively sideways. Unfortunately, EOS is still somewhat tied to Bitcoin. Although, depending on how well the main-net launch goes, we may see EOS start to solely rise and fall on its own merit. The first week in June should be very telling.
BIAS:
Short Term: Neutral
Longterm: Bullish
I hope this has been helpful. I’d be happy to answer any questions in the comment section below. Thanks for stopping by.
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Disclaimer: I am NOT a financial advisor and this is NOT financial advice. Please always do your own research and invest responsibly. Technical analysis is simply a guide. It doesn’t predict the future. Anyone that claims they know exactly what’s going to happen is foolish, lying or both. Technical Analysis should only be used as a tool to help make better decisions. If you enter a trade, I recommend having a stop loss and sticking to it. You will loose at times. The key is to have more wins than losses. With that in mind, I wish you great success.
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