EOS Breakout Could Take It Above 50,000 Satoshis

Highlights

• EOS is trading inside an ascending triangle.
• The RSI supports a price breakout
• There is resistance at 45,500 and 51,000 satoshis.
• There is support at 40,000 satoshis.
• A golden cross has transpired.

Cryptocurrency trader and analyst @imBagsy tweeted an image of the EOS price chart stating that he is being patient with this trade until the price reaches his target, which is found at 65,000 satoshis. Also, he noted that the setup would be invalidated with a price close below 39,000 satoshis.

$EOS

I'm being patient with my long; ultimately I'm targeting the EQ.

I'm prepared to buy the dip in case we get a shake-out before the move, invalidation if we begin closing beneath 3.9 on a slow grind; wicks are fine. pic.twitter.com/w2MnYDqgPh

— Bagsy (@Bagsy) February 4, 2020

Let’s take a closer look at the EOS price movement and determine where it is heading to next.

Ascending Triangle

On January 14, the EOS price broke out above the 40,000 satoshi resistance area. The breakout transpired with very significant volume, confirming the validity of the movement. The price reached a high of 46,360 satoshis before decreasing. Since then, the price has reached the same level four more times, creating an ascending triangle in the process. This is a bullish continuation pattern, and since it is transpiring after an upward move, a breakout is expected. Technical indicators are in line with this possible price breakout. First, EOS is trading above its 10-day moving average (MA), which it has used as support throughout the entire ascending triangle. Also, the RSI crossed above the 50 line on January 20, coinciding with a low on the EOS price. Since then, it has been comfortably above 50 and has been using the line as support. Therefore, as long as the price stays above the ascending support line and the RSI stays above 50, we are expecting a price breakout. Estimating from the point of convergence between resistance and support, the breakout should transpire by February 10 at the latest.

Future Movement

The daily chart reveals more bullish sentiment. There is a bullish cross between the 50- and 200-day moving averages (MA), otherwise known as a golden cross. This suggests that the EOS price has begun a new bullish market cycle. In addition, the closest resistance area is revealed to be at 51,000 satoshis. A breakout that travels the entire height of the ascending triangle would take the price inside this resistance area. This possible movement has some similarities to a move that transpired in February 2019. After breaking out from a descending resistance line, the price increased by roughly 18%, a magnitude that if it were to occur now, it would take the price inside the resistance area. However, in February 2019, the price retraced for a short period then continued to reach new highs. Thus, while the 51,000 satoshi resistance level is expected to provide resistance to the price, it will not necessarily cause a reversal. Afterward, the price could increase towards the 65,000 satoshi resistance area, as is stated in the target given in the tweet. To conclude, after breaking out above a significant resistance area, the EOS price has been consolidating. We believe it will break out from the current ascending triangle and reach the resistance area at 51,000 satoshis and possibly more.