Key Takeaways:
- EOS prices have been defying the crypto market downtrend, gaining over 111% in six weeks.
- Additionally, the altcoin has broken out of a bullish technical pattern.
- However, EOS's overbought RSI might dampen the uptrend.
NEW DELHI (CoinChapter.com) — EOS price has been rallying upwards since July 13, competing against the wider market downtrend. The token rallied by over 111% in 42 days to reach a high of $1.9 on Aug. 23 from July 13’s low of $0.9.
Moreover, the token has registered massive gains since Aug 20, even charting its highest single-day gains since May 24 last year on Aug 22. Moreover, EOS prices broke out of a bullish technical setup called the inverse head and shoulders (IH&S).
In detail, the inverse head-and-shoulders pattern entails three consecutive bottoms – the shoulders and the head in between. All three dips connect through a mutual Neckline. As the formation progresses, the price action forms the three dips and returns to the neckline.
The pattern predicts a surge in EOS price if the token conquers the neckline. The token broke above the pattern’s neckline on Aug 20. As such, EOS prices eye a 58.3% jump from its neckline price level to reach $2.19.
Moreover, EOS’s likelihood of extending the upside momentum increased with its moving averages forming a golden cross. EOS’s 20-day exponential moving average (20-day EMA; the red wave) moved above its 100-day EMA (the blue wave) — a buy signal in the near term.
Related: EOS token rallies 30% ahead of network upgrade and rebranding.
A golden cross usually indicates a bullish uptrend on the horizon
Overbought RSI Pulls EOS Price Back
However, EOS prices fell on Tuesday after the token’s 200-day exponential moving average (200-day EMA, green wave) rebuffed EOS’s uptrend. In addition, the relative strength index for the EOS token reached overbought levels on Aug 22.
The RSI measures the magnitude of recent price changes to analyze overbought or oversold conditions. Traders often consider overbought RSI values as a sell signal. The altcoin’s prices reacted in a textbook fashion, with EOS prices dropping nearly 10% between high ($1.89) and low ($1.71) on Aug 23.
A sell-off could result in EOS price falling to support near $1.67. In addition, a marketwide sell-off could force EOS prices to test support near $1.53, a drop of nearly 12% from current levels.
Conversely, if the token’s prices take a cue from their bullish indicators, EOS prices could move above the 200-day EMA (the green wave) to target resistance near $1.86. Conquering the 200-day EMA would provide EOS the impetus to reach $2.03, a jump of 17% from current levels before prices pull back.
At writing, EOS was trading at $1.72, down 6.36% on the day.
