The ENJ Breakout Could Have Caused a Trend Reversal

Highlights

• ENJ is following an ascending support line.
• Moving averages indicate that the price is in an upward trend.
• The price broke out from an inverse head and shoulders (H&S) pattern.
• There is support at 960 satoshis.
• The short-term outlook supports a decrease in the 960 satoshi support.

Full-time trader @CryptoMichNL outlined the ENJ price, stating that he has been taking profit with a significant portion of his position during this upward move. He believes the price will retest the 950-970 satoshi area before continuing upward.

$ENJ #ENJINCOIN

That's T2 hit for 23% here.

Taking some more off from the table, should be seeing some sort of retest at 950-970 satoshis before continuation.

Interested in the setups? DM me on Twitter or mail; [email protected]. pic.twitter.com/g4RdTsWlGU

— Michaël van de Poppe (@CryptoMichNL) January 23, 2020

Let’s take a closer look at the price movement and see how likely this decrease is to transpire.

Significant Areas for ENJ

The ENJ price has been following an ascending support line since it reached a low of 510 satoshis on Aug 9, 2019. The price bounced on the support line on January 14 and has been increasing since. The price has reached the 1000 satoshi resistance area, which was the previous breakdown level. While it briefly increased through it, it has failed to reach a daily close above it. The sentiment is bullish, mainly because the 100- and 200-day moving averages (MA) have made a bullish cross, and the price is trading above them. Looking closer at this movement, we can see that it is possible that the price broke out from an inverse H&S pattern on January 22. The RSI supports this since it has moved above the 50 line, indicating that the trend is bullish. We successfully predicted this breakout in our previous analysis. But, based on the height of the pattern, the price has reached a short-term top, and a corrective period will follow.

Future Movement

In the short-term, a price decrease seems likely. While the price has been increasing rapidly, it has been giving strong reversal signals. Besides several long upper wicks, the RSI has created a head and shoulders pattern combined with bearish divergence. The RSI line is falling, heading towards the 50 line. A price decrease would likely cause the RSI line to fall below 50. If so, the closest support area is found at 960 satoshis. To conclude, the ENJ price broke out from an inverse H&S pattern, indicating that it has possibly reversed its trend. In the short-term, we believe it will decrease until it reached at least 950 satoshis.