EOS: Will it drop further or is it ready to fly?
EOS is still in a corrective pattern, somewhat similar to bitcoin at the moment. I discussed yesterday the possibility of this being an ABC or an ABCDE type correction. It's developed a wedge that very much looks like an ABCDE pattern.
If that's the case, it could play out a couple different ways. The first has wave D rising a bit further before it drops to complete wave E. This may look like this:
The second ABCDE pattern is the most bullish. It'd have the corrective pattern complete, with wave 1 currently in progress. The problem I have with this is, volume is weak. It doesn't seem like an impulse wave at this point. That said, many EOS first waves start off weak when following a long correction. They then end up gaining momentum. If this is the case, it may play out like this:
The second possible corrective pattern is more bearish in the short term. It would have EOS in an ABC type correction. To determine a logical place for wave C to drop, I pulled the fibonacci retracement tool from bottom to top of the prior 5 waves.
A logical place for wave C to drop would be between the bottom of wave A and the 0.5 fib level. However, there's strong support around $14.70. Due to that, I'm putting a target zone for wave C just above the 0.05 fib level. If this scenario is correct, the target for wave C would be between $16.00 and $14.70.
Once this scenario is complete, I'd expect an impulse wave up...something like this:
Looking at the 30 min MACD, we can see the histogram is being squeezed tighter and tighter within a wedge. As it moves closer to the apex, a breakout becomes more and more likely.
The 1 hour RSI has developed strong support at 29.9. If this support breaks, I would expect EOS to follow the ABC correction above.
Finally, looking at the 4 hour chart, we can see the 8 day EMA has fallen below the 21 day EMA. This is a slightly bearish sign, but I'm not reading too much into it at this time. If the 8 day EMA falls below the 55 day EMA, that'd be a very bearish sign and I'd need to reassess my analysis.
If you're unfamiliar with how EMA's work, please review my post explaining how to use EMA's to predict trend changes here: https://steemit.com/cryptocurrency/@workin2005/simple-effective-strategy-to-buying-and-selling-market-trends
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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Haven't invested in Eos yet. I'm currently only holding big in Omeisego just waiting for its bull run!
OMG is a great coin as well.
Yep its seriously undervalued at the moment. I'd say it'll hit 50 by the end of this year.
Great analysis, just read this 5 hrs after you posted, looks like we had a nice jump up to 18.50... what are your views for the next 7 days? Im bullish
I'm generally very bullish on EOS, especially long term. Right now, all signs point to a continued rise over the next 7 days. But I can't say anything for certain. EOS is still somewhat tied to bitcoin. If it falls, EOS will most likely fall. That said, current signs look good. I think we'll see new all time highs this month.
Dawn 4.0 beta to mainnet is being released this month.... so that will help
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STOPI am coming back to this post now May 15th and EOS is dropping hard, just broke under $13. The wedge broke down and at this writing appears to be dropping again from the current levels. Not easy to get this right, realize that. Looking for next flight toward new ATH.
This post is almost 2 weeks old. I've put out 5-6 updates since then. Remember, technical analysis is constantly changing and never 100% accurate. Anyone who tells you they know for sure what will happen is lying or foolish.
All an analyst can do is look at the technical information at any given time, and then pass on that information to investors. Sometimes the market surprises us...especially in crypto. You can have the most bullish looking chart for a given altcoin, and if bitcoin drops, there's a 90% chance that altcoin will drop as well. That's why we have stop-losses.
With EOS, I gave multiple warnings of a possible major drop before it happened. That's all I can do as an analyst. I do believe EOS will rise to new ATH's in another few months if not before. The thing holding back the market is fear of regulatory action by the SEC. We just had the shapeshift exchange stop allowing US customers to use their service for certain coins. They fear they will be labeled a security. One of those coins was EOS. This uncertainty is NOT good for the market. We need regulatory clarity before any more major investors are going to enter the market. When we get that clarity, the sky will be the limit.