- Falling wedge in the daily chart might bring 40% gain.
- Rising channel formed on June 22
- What’s behind the rally?
YEREVAN (CoinChapter.com) – EOS, the native token of Block.one’s Eosio enjoyed a 23 percent upside headway in the previous sessions and hasn’t slowed down over the weekend.
The EOS/USD exchange rate stood at $4.29 in the Asian-Pacific session Monday, with no intention of stopping the bullish momentum. Moreover, a 40 percent rally might be underway, according to a bullish reversal setup.
EOS traded in a “falling wedge” pattern from mid-May to July 5, after which it finally left the formation. In detail, falling wedges consist of two contracting trendlines, enveloping the price action while driving it in an overall downward direction. The structure predicts a shift in bias from downward to upward as the price approaches the apex—where its two trendlines converge.
According to the formation, the future price target for the token could stand at approximately $6.0. The target is determined by the maximal distance between the trendlines at the start of the pattern.
EOS also retests the 20-day exponential moving average (EMA-20; blue wave on the chart above) as support on July 9.
Also read: Is this the right time to buy Bitcoin? These indicators say so
Rising channel
Eosio’s token started to form another pattern after bottoming out on June 22. The newly-formed rising channel is more visible on the four-hour chart. The parallel trendlines of the channel prevent sharp breaks in either direction. The formation by itself is not indicative of a future bias.
However, combined with the falling wedge formation, an optimistic outlook looks warranted.
If EOS continues the ascend, it could rise all the way up to $6.0, fulfilling the prognosis. If not, the token has two significant support lines to retest at $3.51 and $2.44.
Also read: Cosmos (ATOM) logs 47% gain in breakout rally; what’s fueling the bulls?
What’s driving the rally?
It is unclear what prompted the bull run on July 9 and the subsequent jump on July 11. However, Eosio belongs to the Decentralized Finance (DeFi) sector, which is booming in the crypto market.
EOS is one of the “Ethereum killer” tokens, primed as strong competitors to the leading altcoin. It features low transaction fees, scalability, and speed.
Despite the fundamentals, EOS still has a small users base and a puny market cap ($4.1 billion), compared to larger Ethereum competitors like Cardano($43.8 billion) or Polkadot ($15 billion). However, the platform has strong proponents like Mike Novogratz, the CEO of Galaxy Investment Partners.
Also read: Ethereum fees drop to 7-month low amid signs of rising utility, is it bullish for ETH?
If the EOS’s bullish rally continues, the token could go all the way to $6.00, the highest value since June 4. The latest rally took the price to 4.29, while the falling wedge formation hinted at further gains. However, it is not yet clear if EOS is a good investment in the long term. It features strong fundamentals, but the user base is still small.
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