EOS is consolidating inside a falling wedge on its 4-hour time frame and is currently testing the top. Price could tumble back to the bottom if this resistance holds or attempt to make a breakout.
However, the 100 SMA is below the longer-term 200 SMA to suggest that the path of least resistance is to the downside. In other words, resistance is more likely to hold than to break. Also, the moving averages could hold as dynamic inflection points and keep gains in check just around the 8.000 mark.
RSI is also turning lower after briefly hitting overbought levels, indicating that selling pressure is about to return. Similarly stochastic just reached the overbought region to reflect exhaustion among buyers and is ready to head south, so EOS could follow suit.
If selling pressure is strong enough, EOS could make a break below the wedge support and trigger a sharper selloff. Note that the wedge pattern spans 6.000 to around 22.000 so the resulting move could be of the same height.
Cryptocurrencies like EOS had a rough previous week owing to dollar strength and risk-off moves. It didn’t help that economists like Roubini and Stiglitz blasted bitcoin and its peers once more, dampening investor sentiment even after a strong start the other week.
This time, the mood seems to have improved once more as buyers continue to defend near-term support zones. For many, this represents as good a time as any to hop in the market while prices are low.
Still, trade-related headlines could continue to influence cryptocurrency demand in the week ahead, along with overall market sentiment. Updates on industry regulation could also affect price action, and it’s worth noting that the US recently indicted twelve Russian officials for allegedly using cryptocurrencies to interfere in the elections in 2016.