EOS Reaches Crucial Juncture, Price Action Suggests Upside Break
EOS price declined recently after testing the $3.00 resistance area against the US Dollar. The $2.20 support holds the key for the next move versus USD and BTC.
Key Talking Points
EOS price is placed nicely above a major support at $2.20 (Data feed of Kraken) against the US Dollar.
Recently, there was a break below a key bullish trend line with support at $2.78 on the 4-hours chart of the EOS/USD pair.
There seems to be an inverse head and shoulders pattern forming with resistance at $2.50.
EOS Price Analysis
This past week, there was a solid upward move in EOS price above the $2.40 and $2.50 resistance levels against the US Dollar. The EOS/USD pair gained momentum above the $2.80 resistance and traded close to the $3.00 handle.
The chart above indicates that EOS price traded as high as $2.97 and later started a sharp downside correction. It declined below the $2.60 and $2.50 support levels to move into a short term bearish zone. There was even a close below the $2.50 support and the 100 simple moving average (4-hours).
More importantly, there was a break below a key bullish trend line with support at $2.78 on the 4-hours chart of the EOS/USD pair. The decline was such that the price tested the main support near the $2.20 level.
A low was formed at $2.20 and the price later corrected higher. It moved above the 23.6% Fib retracement level of the last drop from the $2.97 high to $2.20 low. However, buyers failed to gain traction above the $2.50 resistance area.
At the outset, it seems like an inverse head and shoulders pattern is forming with resistance at $2.50. Besides, the 50% Fib retracement level of the last drop from the $2.97 high to $2.20 low is near the $2.58 level and the 100 simple moving average (4-hours).
Therefore, a break above $2.50, $2.58, and the 100 simple moving average (4-hours) could open the doors for a sharp upward move in EOS towards $2.80 and $3.0. If not, there are chances of a downside break below $2.20 and $2.00.