From previous analysis, this correction was in the offing and given the rate at which prices depreciated exacerbated by the current toxic environment cryptos are trending in, it is likely that EOS will move lower and even test July 2017 highs of $5.5 in the coming sessions.
Technically, last week’s bear engulfing candlestick confirmed a double bar bearish reversal pattern which corrected the over-valuation visible by week ending January 21.
Given the way prices are realigned in this time frame, sellers should be looking from better selling opportunities in lower time frames and it actually doesn’t make sense to jump in right now.
When we refer to historical prices, price action tend to recover slightly following such kind of dips as we witnessed last week as they retest key Fibonacci retracement levels in lower time frames before resuming back to the main trend.
Alternatively, rather than sellers picking out tops, we shall consider the 1st Fibonacci extension level at around $9 as a possible sell trigger and any close below it shall be inviting for sellers.
In the daily chart, price action is echoing the general feel in the weekly chart.
First, EOS is overwhelmingly bearish and that’s not because of that near perpendicular drop following the surge and close below the BB but because of these bear candlesticks are aligned along the lower BB. From this set up, potential sell zone at around $9.0-$9.4 is where we shall focus on.
Given the set up and general flow, sell opportunities should be sought in lower time frames.
In my view, every high is a selling opportunity and even though EOS might recover now that prices are even below our first TP targets at around $7.5, we don’t recommend scalping and trading against the main trend.
From the daily and weekly chart, strong resistance is expected at around $9 and $9.4 and that fails right back to the middle BB in our entry chart.