The EOS price has printed a new high for 2020 of $9.274, gaining +42% in Asian trade as the altcoin investing mania continues to gathers pace.
The altcoin market continues to see huge capital inflows as investors embrace the new digital economy of decentralized finance (DeFi) and decentralized apps (DApps). The EOS price has been the latest beneficiary, rallying to a new 2020 high after once again bouncing off the key 100-Day Moving Average.
In my article published on the 30th of April, I discussed the EOS price performance following a test of the 100-Day MA. Since the start of the year, the price has seen an average increase of 79% after testing the indicator.
Since the most recent touch of the support level on the 23rd of April, a similar rally is underway. At today’s high of $9.260, the EOS price had added 110%, surpassing the previous 2020 high at $8.83.
If we look at the 1-hour chart, we can see that prices have become a little over-extended in this time frame. The relative strength index (RSI) reads 79.18. This indicates that the recent EOS price appreciation has taken it into ‘overbought’ territory. Typically a reading greater than 70 on the RSI would suggest the price may need a period of consolidation or a pullback before posting further gains.
That’s not to say that the price can’t go higher in the immediate future; however, bullish traders should consider this when looking for entry points.
Should the market fail to hold on to gains above the previous 2020 high of $8.830, there remains potential for a pullback to the 50% Fibonacci retracement level at $6.900. This area would offer better risk vs. reward dynamics for bulls. Traders buying into this dip should place stops below the 2nd and 4th of May lows of $6.200 as a break of this level suggests a deeper price decline, targeting the 29th of April low at $5.620
Follow Elliott on Twitter
