- EOS breakout from a descending triangle temporarily hits pause at the 200-day SMA.
- An ascending wedge pattern on the 4-hour chart hints at a potential breakdown to $2.2.
EOS retreated nearly by 43% from the highs traded in August at $3.88. Support slightly above $2.2 brought back some semblance of stability as well as hope for recovery. However, a recent breakout has run into stacks of resistance, hence delaying the expected bullish momentum.
EOS stuck between key resistance and support
The smart contract has recently broken above a descending triangle’s hypotenuse. This called for an increase in buy orders, culminating in gains past $2.5 and the 50 Simple Moving Average.
However, the breakout has been cut short by intense seller congestion at the 200 SMA on the daily chart. To sustain the uptrend, EOS has to close the day trading above this immediate hurdle. At the same time, buyers must be aware that the 100-day SMA may hinder price movement at $2.75.
EOS/USD daily chart
The same daily chart shows EOS attempting to break above the upper boundary of the Bollinger Bands. If bulls pull through with their mission, EOS might come out of the extended consolidation. The price must also hold above the middle boundary of the indicator to ensure that the potential bullish outlook is guarded.
On the other hand, the Relative Strength Index emphasizes the sideways price action. It is worth noting that EOS is slightly in the bulls' hands, especially with the RSI holding above the midline and pointing north.
EOS/USD daily chart
The 4-hour chart brings into the picture an ascending wedge pattern. In other words, this pattern might validate the bearish outlook, mostly if EOS gets rejected at $2.7.
EOS/USD 4-hour chart
Trading below the wedge will call for a surge in sell orders and create enough volume to push EOS/USD back to the drawing board ($2.2). Note that the 50 SMA, 100 SMA and 200 SMA will absorb some of the selling pressure and prevent the price from falling sharply.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.