Despite the criticism it is receiving for being a pseudo-decentralized blockchain project, EOS is performing exceptionally well on the trading front.
The EOS/USD rate during the weekend noted more than 16% surge. The upside action came in continuation of a strong bounce back from the 1.546-fiat level on Friday. The combination of Friday and weekend price actions marked a circa 40% rally for EOS, during which market cap added over $400 million in profits.
There are no substantial factors that claim a role behind the ongoing EOS rally. True, the coin has made into the Coinbase list of could-be-added crypto assets, but there are also 29 other coins that have made into the same list. But they have not displayed any aggressive upside actions like EOS. XRP, for instance, is mentioned in the Coinbase list but its 24-hour adjusted price performance, according to CoinMarketCap.com is +0.16% (at press time).
On Monday, the EOS/USD rate is hinting a correction action, however. The pair established a higher high during its uptrend towards 2.192-fiat, following which it underwent a sharp pullback. Nevertheless, the bearish jerk is well within the range the technicals are establishing for the pair. It could, therefore, go ahead for a reversal action, to continue its uptrend further. Let’s have a look at the chart below to understand it better.
The EOS/USD in trending inside a near-term ascending channel, forming higher highs and higher lows. The pair has just reversed from its upper trendline, derived after connecting the recent swing highs. It is now targetting the lower trendline to the downside for a potential pullback action. The sentiment is pretty bullish near-term and is also signaling profitable opportunities for day traders.
That said, traders can open a long position when EOS/USD reaches the lower trendline and exit the trade when the pair touches the upper trendline. Similarly, traders can also open a short when EOS/USD reaches the upper trendline and exit the trade when it the lower one comes into its range. A stop-loss order placed just below the opening position and against the direction of the price action should maintain the overall risk management of the trade.
Then, there is a breakdown/breakout scenario that should be considered. If EOS/USD breaks above the upper trendline while riding on a notably increase volume, then opening a long position towards, in our opinion, 2.5-fiat would make sense. Similarly, if the pair breaks below the lower trendline, then opening a short position towards the 50-period moving average on a 1H chart timeframe could prove profitable.
In the meantime, traders should watch out for $2-range for a potential reversal action as well. It’s only a psychological barrier.
Click here for a real-time EOS price chart.
Featured Image from Shutterstock. Charts from TradingView.
Last modified: May 20, 2020 2:09 PM UTC