EOS recently broke below the bottom of its symmetrical triangle formation to signal that further losses are in the works. However, price is nearing a major area of interest that might draw bullish attention.
Unfortunately for buyers, the 100 SMA is still below the longer-term 200 SMA to indicate that the path of least resistance is to the downside. The gap between the two continues to widen, reflecting stronger selling pressure. The 100 SMA is also near the triangle top to add to its strength as a ceiling in the event of a big bounce.
However, stochastic is already dipping into the oversold region to indicate that selling pressure might fade soon. Once the oscillator pulls higher, buyers might be encouraged to return and defend the area of interest around 3.500. This is around a former resistance, which transformed into support later on.
RSI is also in the oversold region but continues to move south to signal that sellers still have plenty of energy. Turning higher or bottoming out could still indicate that bearish pressure is exhausted.
Cryptocurrencies are still deep in the red for yet another day, further building on the FUD that has been weighing heavily on prices. Some blame the Bitcoin Cash hard fork that led to a lot of uncertainty in the markets while others are also looking at the SEC ICO crackdown that also contributed to the slide.
Analysts predict that it could take much longer to recover from this drop and many think that a big rebound for the year is already impossible. Even prospects of a recovery next year are also being pushed back as institutional funds might be discouraged from putting money in the industry at this point.
Risk aversion in financial markets is also dampening investors’ mood to take on more risk while stock markets and commodities are on the decline.