Bitcoin’s surge above $ 9,000 drew investors’ attention away from altcoins, with most coins posting single-digit losses compared to BTC. This technical analysis examines whether EOS, Stellar, Cardano and TRON are preparing for a rebound when interest returns.
EOS (EOS)
Support and resistance levels use historical data to identify the price points that act as impediments to bearish or bullish moves and interrupt the continuation of a trend due to abnormally high supply or demand.
On the 1 week chart, EOS is trading above the USD 6.92 support level. A break below this price could bring the cryptocurrency down to $ 6.00 while a bullish impulse could hit the next resistance levels at $ 7.75, $ 9.00, $ 10.50, or $ 12.50.
Source: TradingView’s EOS / USD chart
EOS trades on an ascending parallel channel that contains price action since December 18, 2018 on the 3-day chart. The coin has reached higher ups and downs that characterize this technical pattern.
Now that it has hit the bottom of the canal and ricochets, it could be on its way back to the center of the canal where it might find resistance. If buying pressure mounts, EOS could reach the top of the channel and hit a new high for the year.
Source: TradingView’s EOS / USD chart
On the 1-day chart, this cryptocurrency looks bullish as the 50-day moving average prevented it from falling further. And crypto was able to hit the 7-day moving average again in the past 5 days.
A gold cross could appear in the next few days if and when the 7-day MA moves above the 30-day MA. Since this is a bullish breakout pattern, if validated it adds credibility to the upward movement observed during this period.
Source: TradingView’s EOS / USD chart
Stellar (XLM)
Stellar could see a strong rally soon as most long to medium-term time frames have bullish patterns.
For example, on the 1-week chart, a golden cross developed between the 7-week and 30-week moving averages two weeks ago, and XLM is currently trading above the 7-week moving average, both bullish signals. A push up to the 50-week MA was to be expected.
However, if selling pressure rises and XLM falls below the 7 week MA, it would likely attempt to test the 30 week moving average.
Source: TradingView’s XLM / USD chart
An inverted head and shoulders pattern formed on the 3-day chart, predicting a bearish to bullish trend reversal. A move above the resistance, also known as a cutout, could signal a strong upswing that needs to be confirmed by a large spike in volume to confirm that the pattern is indeed a breakout.
This technical formation projects a 47 percent profit target which is achieved by measuring the distance between the head and neckline and adding it to the breakout point. A move below $ 0.120 could be the first sign that the head and shoulders pattern is going to be invalid and a break below the right shoulder confirms it.
Source: TradingView’s XLM / USD chart
A bull pennant has formed on the 1-day chart and may be in the breakout phase. This is believed to be a continuation pattern that developed after a sharp upward move known as the flagpole, and which was preceded by a period of consolidation known as the pennant. This bullish formation predicts a 45 percent upside target determined by measuring the height of the flagpole.
Now that XLM appears to be breaking out of the pattern, it could be on its way to achieving the aforementioned goal. However, if it reverses and moves below $ 0.116, the bull pennant will be void.
Source: TradingView’s XLM / USD chart
Cardano (ADA)
Cardano has been consolidating since early April, mostly between the $ 0.07 support and the $ 0.10 resistance level, although it fell to $ 0.06 in early May.
Now ADA is trading around $ 0.09, which suggests it could try to retest the $ 0.10 resistance level soon. Exceeding this price point could lead to the next supply barrier at USD 0.13.
Source: TradingView’s ADA / USDT chart
An ascending triangle could form on the 3 day chart based on the price action allowing a horizontal line to be drawn along the swing highs at USD 0.10 and a rising trendline along the swing lows. While this is a continuation pattern, a breakout up or down can occur as price usually goes in the same direction as the trend prior to the formation of the triangle.
If Cardano breaks the $ 0.10 resistance level with enough volume, it could hit as high as $ 0.135 which is the target of the bullish formation.
Conversely, a move below the 7 to 3 day moving average could indicate that the ADA will fall to around $ 0.06 depending on the strength of the support from the 30 and 50 day moving averages.
Source: TradingView’s ADA / USDT chart
TRON (TRX)
TRON spent most of the year trading in a range of $ 0.006 between $ 0.023 and $ 0.029. It finally broke out of that trading range around mid-May and hit the resistance level of $ 0.038, which rejected the price of TRX and triggered a regression to $ 0.029.
Based on the TRON price movement on the 1 week chart, it can be assumed that trading will occur between $ 0.029 and $ 0.038. Hence, this cryptocurrency could be on its way to retest the $ 0.038 resistance level, but exceeding that price point could bring it to $ 0.049.
Source: TRX / USD chart from TradingView
On the 3-day chart, TRX is trying to move above the 7-3-day moving average, which will confirm the continuation of the uptrend and a possible test of the $ 0.038 resistance level.
If you are not trading above the 7 day MA, this cryptocurrency can be reduced to the 30 or 50 three day MA.
Source: TRX / USD chart from TradingView
Overall mood
Despite the reduced price movements that the aforementioned cryptocurrencies have had in relation to Bitcoin, they appear to be in the process of continuing the uptrend and possibly hitting new annual highs. It only seems like a matter of time before a breakout occurs and patience will be key to capitalizing on the next upswing.
It is worth noting that most cryptocurrencies in space have grown in value by more than 100 percent since the beginning of the year, so the likelihood of a major correction is not trivial. At this point, in order to minimize the risk and risk, it is advisable to wait for the confirmation before entering a trade.
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