Disclaimer: The findings of the following analysis are the sole opinions of the writer and should not be taken as investment advice
The cryptocurrency market has been seeing a lot of bearish sentiment go around after Bitcoin, the world’s largest cryptocurrency, fell below $50k. With Bitcoin trading under $50k at press time, many market altcoins also seemed to be mimicking BTC’s losses, with these alts also trading in the red.
At the time of writing, EOS was being traded at $3.5 with a registered 24-hour trading volume of over $3.4 billion. Over the course of the week, EOS saw its price drop by a whopping 31 percent.
EOS 1-day chart
Source: EOS/USD, TradingView
As can be observed from EOS’s daily chart, the cryptocurrency has been facing immense selling pressure since the 22nd of February, with EOS struggling to find its footing. At the time of the writing, EOS was testing its resistance at $3.4 and if this level fails, then the bears may force the price all the way down to $3.2.
However, if a trend reversal were to take place for EOS, then it will have to try and attempt to breach the resistance at $4. Given the strong bearish sentiment in the market, this outcome seemed unlikely for EOS at press time.
Traders might benefit from opening short positions since the coin may see its value diminish even further in the coming days.
Rationale
The technical indicators for EOS painted a thoroughly bearish picture. The MACD indicator underwent a bearish crossover and both the Signal and MACD lines were heading south with no sign of a reversal. The RSI indicator was also well into the oversold territory and one cannot expect a reversal in the coming week. With the sellers in control of the market, EOS may shed a bit more of its value before stabilizing and thinking of a recovery run.
Important levels to watch out for
Resistance: $4
Support: $3.4, $3.2
Entry: $3.53
Take Profit: $3.26
Stop Loss: $3.9
Risk/Reward: 0.71
Conclusion
EOS’s price has been on a strong downtrend, with the bears continuing to be in control of the market. The crypto’s price looked likely to fall and breach its immediate support. This will push EOS towards the $3.2-range. However, this can be averted if the coin is able to head towards its immediate resistance level. Given the present market scenario, that is extremely unlikely.
