The Elrond Price has bucked the weakness in the broader market, racking up five straight days of gains and breaking $500 for the first time. Elrond (EGLD) surged to a record $9.80 billion valuation to become the 23rd-biggest cryptocurrency on Monday. The recent spike brings EGLD’s three-month performance to +810% and over 200% year-to-date.
Although Elrond has been trending uniformly higher from the July lows, most gains have come in the last week. The main reason is likely the announcement of a $1.29 billion liquidity programme. The initiative comes ahead of the launch of the platform’s Decentralized Exchange. The funding will be used to incentivize liquidity providers on the ‘Maiar’ DEX, who will be rewarded with the exchange’s native MEX token. And whilst this is bullish, the current Elrond price is potentially unsustainable, making it vulnerable to heightened volatility.
The short-term momentum indicators are highly elevated in the daily time frame. Notably, the Stochastic RSI is close to its highest possible reading, and the MACD shows the price is over-extended relative to its moving averages. As a result, the odds of a sharp correction are high. Therefore, buying EGLD at the current price is extremely risky. Of course, that doesn’t mean the price won’t go higher in the immediate future, but it’s illogical to expect the current momentum to continue.
EGLD holders, especially those with longstanding positions, should consider taking some profit at the current levels. Whether the parabolic extension continues is hard to say. But, in my experience, moves like this often end badly. On that basis, being fearful when others are greedy is a prudent strategy.
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This post was last modified on Nov 23, 2021, 02:21 GMT 02:21