EOS Technical Analysis: EOS On The Verge Of A Massive Breakdown

EOS has made very little progress in recovery since the free-fall across the cryptocurrency market at the beginning of September. Larger coins like Bitcoin and Ethereum have made great strides towards reversing the downtrend. For instance, Bitcoin refreshed levels above $11,000 mid-this week while Ethereum has traded higher than $390.

Unfortunately, EOS failed to gain traction even with its entrance into the DeFi space, as reported. The digital asset is doddering at $2.73 at the time of writing, following a modest recovery from support at $2.6. Its immediate upside is capped under $2.8 and $3 levels, respectively.

EOSIO development update

Block.one, the company in charge of developing and maintaining the EOSIO blockchain protocol, says that it has updated the developer portal with a “Testnet Quick Start Guide.” The guide is tailor-made for users who employ EOSIO Testnet “as a testing environment for deploying smart contracts and building blockchain applications on EOSIO.” Using the Testnet, developers can launch smart contracts, perform push transactions as well as view multi-index table on a user-friendly platform.

EOS suffers multiple rejections under $3

As earlier mentioned, EOS has not been able to extend the bullish action above $3 since the drop in September's first week. The main barrier being the 50 Simple Moving Average (SMA) in the 4-hour range. Another pending rejection is likely to confirm a potential breakdown and refresh levels around $2.2. Note that a previously discussed, a descending triangle suggests a breakdown target of $1.75.

EOS/USD 4-hour chart

(Click on image to enlarge)

EOS/USD price chart

The Relative Strength Index (RSI) highlights the exhaustion in the bullish camp. The indicator made another recovery from the oversold region but has stalled marginally above 50. As long as the 50 SMA continues to reject the price, EOS is bound to lose traction amid decreasing buy orders and increasing selling orders. Initial support is anticipated at $2.6, but if broken, EOS/USD could spiral to test a lower support zone between $2.2 and $2.4.

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