The EOS (EOS) price is trading near a crucial long-term support level, a decrease below which could trigger a rapid drop. However, the price has begun to show short-term bullish signs, which would be strengthened by a breakout above $2.60.

Long-Term Levels

The weekly chart shows that EOS has been decreasing since it reached a high of $8.65 in May 2019. Throughout the decrease, the price has been following a descending resistance line.

The price purportedly broke out from this line in August 2020 but fell back below it shortly afterward, creating a failed breakout, a bearish sign.

Since then, the price has decreased all the way to the long-term $2.30 support area.

If the price breaks out, the closest resistance area would be found at $3.90, the 0.618 Fib level of the previous decrease and the aforementioned August high.

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Crucial Support

The daily chart also highlights the importance of the $2.30 support area. Cryptocurrency trader @algohammie outlined an EOS chart, stating that the price is trading at a crucial support area, a loss of which could trigger a very rapid price decrease.

The $2.30 area has acted as support since the beginning of April, and it is crucial that the price trades above it for the possibility of continuation to remain valid.

However, technical indicators do not yet indicate that a reversal is near. While the MACD has begun to increase, both the RSI and Stochastic Oscillator are falling, having generated no bullish divergence/bullish cross.

EOS Chart By TradingView

The shorter-term six-hour chart shows the first signs of a reversal. The RSI & the MACD have generated bullish divergence, the latter having crossed into positive territory.

A breakout above the current resistance area of$2.60 would likely trigger an upward movement towards $2.93.

EOS Chart By TradingView

Wave Count

Beginning on March 13, it seems likely that EOS has completed an A-B-C formation with the Aug. 17 high (shown in orange below). Besides having the correct sub-wave count, waves A:C have a 1:1 ratio, making this likely to be the correct count.

The decrease since has now been impulsive, making it unlikely that the price has begun a bearish impulse.

Therefore, it is likely that the price is in the process of creating an X wave, after which another A-B-C formation will transpire.

EOS Chart By TradingView

EOS/BTC

The EOS/BTC pair looks considerably more bearish than its USD counterpart. The price has broken down from the 3,250 satoshi support area and validated it as resistance afterward. The area had been acting as support since September 2019.

The only bullish sign comes from the potential bullish divergence in the weekly RSI, which has created an ascending support trendline and could possibly initiate a bounce.

EOS Chart By TradingView

Unless the bounce is strong enough to cause EOS to reclaim the 3,250 satoshi area, the trend is considered bearish.