On Mar 13, 2019, Electroneum (ETN) was added to the Huobi exchange as a tradeable offering. The next day, Electroneum’s price spiked. A steady downtrend followed. Electroneum is currently trading at values higher than before the spike.
Here is a look at the prices in the period from Mar 14 to Mar 15:
This is the earliest data available from Tradingview begins on Mar 14 around when the spike occurred. No previous dates are included in this dataset. Furthermore, the USD/ETN pair is not available, so the BTC pair is used instead. Therefore, all the values below are in BTC (₿) instead of USD ($).
Based on today’s analysis, the price of Electroneum is likely to trade around the same level for a period of time, before ultimately making an upward move.
Key Highlights For Mar 15
- The price is trading inside a descending channel.
- The MACD and SMAs have triggered a buy signal.
- There is support near 0.00000140.
- There is resistance near 0.00000210 and 0.00000260.
Descending Resistance Line
The price of ETN on Huobi is analyzed at five-minute intervals from Mar 14 to Mar 15.
The price made a high of 0.00000280 on Mar 14. A rapid price decrease ensued. The price stabilized later that day, making another high at 0.00000186. It has continued to make lower highs since. Tracing these highs gives us a descending resistance line.
The resistance line acts as a ceiling to price, preventing further upward movement. It also serves to measure the rate of a price decrease.
The price of Electroneum has decreased at the same rate as predicted by the resistance line.
It is likely that the price keeps decreasing at the same rate as predicted by the line until a breakout occurs. The resistance line alone is not sufficient in predicting when the breakout will occur.
The price made a low of 0.00000163 on Mar 18. Later that day, it made a lower low at 0.0000154. Tracing these lows gives us a descending support line.
Similar to the resistance line, the support line acts as a floor to price, preventing further downward movement while predicting the rate of decline or growth. Before the resistance is moving in a downward movement, it further confirms the current downward trend of ETN suggested by the support.
The support and resistance lines combine to form a descending parallel channel. This is a generally neutral pattern with prices rising and falling between the support and resistance. However, the downward angle of the channel suggests gradual average price decreases.
Based on this pattern, it is likely that the price keeps decreasing at the rate specified by the channel until a breakout or breakdown occurs.
The moving average convergence divergence (MACD) is a trend indicator that shows the relationship between two moving averages (long and short-term) and the price.
Combined with simple moving averages (SMA), MACD can be used as a trigger for buy and sell signals. Signals are triggered whenever the MACD line is above 0 and the price is above the 21 (red) and 50-period (green) SMAs.
On Mar 15, the price initiated a gradual upward move which took it above the 21 and 50-period moving averages. During the same interval, the MACD line crossed above 0. This would have triggered a buy signal, indicating that an uptrend may be starting.
Using this indicator, it is likely that the price of Electroneum keeps trading close to the resistance line of the channel, before eventually breaking out. Price increases are to be expected. It is unlikely that price will rise as rapidly or significantly as it did following the Huobi listing.
Resistance And Support
Resistance and support areas are created when the price visits the same level several times. They are helpful in predicting possible reversal areas.
The closest support area is found near ₿0.00000140. If the price were to break down from the channel, this would provide a likely reversal area.
The first resistance area is found near ₿0.00000210. The second one is found near ₿0.00000260. If the price were to break out from the channel, these would provide likely reversal areas. Based on our analysis, it is likely that the price eventually reaches one of these areas.
Summary Of Analysis
Based on our analysis, the price of ETN is likely to trade inside the confines of the descending channel before eventually breaking out. If the price trades inside the channel, this prediction will be partially validated. If it then breaks out, it will be fully validated. A price breakdown below support would invalidate the prediction.
What do you think will happen to the price of ETN? Let us know in the comments below.
Disclaimer: This article is not trading advice and should not be construed as such. Always consult a trained financial professional before investing in cryptocurrencies, as the market is particularly volatile.