- EOS price rallied sharply above the $5.270 and $5.780 resistance levels against the US Dollar.
- The price jumped above $6.500 and traded towards the $6.950 and $7.000 resistances.
- There is a major bullish trend line forming with support near $6.220 on the 4-hours chart of the EOS/USD pair (data feed from Binance).
- The pair remains well supported on the downside near the $6.420 and $6.220 levels.
EOS price gained significantly above $6.000 against the US Dollar, and rebounded vs bitcoin. The price is likely to continue higher and it may even trade towards the $7.000 and $7.450 levels.
EOS Price Analysis
The past few days were very bullish, with heavy gains in bitcoin, Ethereum, ripple, litecoin and EOS against the US Dollar. Earlier, EOS price settled above the $5.250 resistance levels and started consolidating gains. It traded in a broad range and finally climbed above the $5.550 and $5.780 resistance levels. It opened the doors for more gains above the $6.000 resistance and the price settled well above the 55 simple moving average (4-hours). The recent upward move was strong above the $6.205 and $6.550 resistance levels.
The price traded close to the $7.000 resistance and swing high was formed at $6.922. At the moment, the price is correcting lower below $6.800 and the 23.6% Fib retracement level of the last wave from the $5.934 low to $6.922 high. The price even tested the $6.400 support area and the 50% Fib retracement level of the last wave from the $5.934 low to $6.922 high. However, there are many supports on the downside near the $6.400 and $6.200 levels.
There is also a major bullish trend line forming with support near $6.220 on the 4-hours chart of the EOS/USD pair. The trend line support is likely to act as a strong buy zone above $6.200. On the upside, an initial resistance is at $6.685, above which the price is likely to retest $6.800. The main target for the bulls could be $7.00, followed by $8.000.
Looking at the chart, EOS price is clearly trading in a strong uptrend above $6.400 and $6.200. As long as the price is above the $6.200 support, it is likely to climb above the $6.800 and $7.000 resistance levels. Conversely, a break below the $6.200 support might start an extended downside correction. An immediate support is $6.150, below which the price could retest the $5.780 support.
Hourly MACD – The MACD for EOS/USD is placed nicely in the bullish zone.
Hourly RSI (Relative Strength Index) – The RSI is currently correcting lower from the 80 level and it could test 65.
Major Support Levels – $6.400 and $6.200.
Major Resistance Levels – $6.800 and $7.000.
Ethereum (ETH) Might Retest $280 But Long Term Outlook Remains Bearish
Although quite unlikely, it is possible that ETH/USD might test the $280 level again and even rally towards $300 before beginning its next decline. That being said, it is not a good idea to take that trade as the risk/reward is definitely not worth it. The 4H chart for ETH/USD shows that the price is trading within a descending channel and an ascending triangle at the same time. The perfect scenario for the whales if they can pull it off would be to pump the price above the ascending triangle first to trap in retail bulls and hunt the bears. Then they would pull it back into the descending channel to trap the bulls. At every trading setup, the market maker is looking for ways to take advantage of retail traders especially around turning points.
This is why most traders believe in going with the flow although going with the flow in this market could mean being a dead fish at certain times. The ideal play here would be to wait for a break out and see if price enters the descending channel. There is no doubt whatsoever that ETH/USD is long overdue for a sharp retracement and at some point that will happen. However that move is more likely to come at a point when both the bulls and the bears least expect it just like the recent rally. A lot of bulls feel very euphoric at the moment but most of them did not see the current rally coming. A lot of people on both sides were taken by surprise when Ethereum (ETH) pumped in that manner. Now, instead of being worried, most of them just got onboard and forget about their opinions before that pump. Some ‘reputed’ traders even took a 180 degrees turn like nothing had happened.
Ethereum (ETH) shorts are still struggling as retail bears fear a rally to $300. Considering what they have seen in the past few weeks, it is reasonable to see that most of them are too scared to take a trade at this point even if the risk/reward is worth it. ETHUSDShorts has been struggling to break past the 50 day moving average but it has yet to succeed. The number of margined shorts could rise towards the top of the channel as early as next month as sell pressure on ETH/USD mounts. The market is not short of catalysts that could trigger Ethereum (ETH)’s next decline at this point.
As mentioned in our last analysis on ETH/USD, there is a strong bearish divergence on the weekly time frame that points to massive downside ahead. One thing to note here is that traders that are patient always see the price coming to them instead of them chasing the price. When BTC/USD fell to $6,000 a lot of people FOMO’ed into the market thinking this was it, but that was not it. Not as many people FOMO’ed in the $3,000s but they did soon afterwards. Either way, this is not the bottom. When ETH/USD bottoms, we will see more of “Ethereum (ETH) is a scam” and “Ethereum is going to zero”. At that point most of these overly excited retail bulls would want nothing to do with Ethereum (ETH) or any other cryptocurrencies.
Ethereum Foundation announces how its spending $30 mln to develop network
The Ethereum Foundation announced in a recent blogpost on May 21, their plan for spending $30 million to develop the Ethereum network further over the next year.
The $30 million being spent is going to be allocated for three different categories. $19 million is set to be spent on future projects, $8 million is set to be spent on current projects, and $3 million is set to be spent on developer support.
The bulk of the $30 million, which is set to be spent on future projects, is set to include various projects to scale the network. These projects have been dubbed Ethereum 2.0 projects and include client teams, research, documentation and communication, and layer 2 projects like Plasma.
Plasma is set to enable “the blockchain to be able to represent a significant amount of decentralized financial applications worldwide,“ according to the blogpost. The first mention of Plasma was proposed by Vitalik Buterin and Joseph Poon in 2017.
The blogpost also laid out the main reason to scale the platform over the next year in the blogpost:
“Ethereum is used in production today to secure billions of dollars of assets and as a base layer for many hundreds of live applications. We believe that it is vital to continue supporting these efforts to ensure that “Ethereum 1.0” continues to be the world’s dominant smart-contract platform.”
Ethereum transactions have risen 44% in just 3 months
It is being reported by LongHash that transactions on the Ethereum network have been on the rise lately, and have recently seen a new high that is 44% above where it was only 3 months ago.
When looking at a chart outlining network transactions from February 19th to May 19th we can see that, although there was a slight dip after, the total reached a new high of 735,400 tx/day. Seeing as that number was only 512,460 three months prior, this constitutes a 44% rise in the daily number of transactions using Ethereum.
In addition, the total amount of Gas being used to power the network every day has risen from 31 billion to 48 billion in the same timeframe.
Reasons for this almost certainly include an influx of users, but also an ongoing evolution of smart contracts. Since complex smart contracts can consume more Gas and perform more transactions, hypothetically, then it is likely that what is being seen here is generally more users interracting with increasingly complex dApps.
All of this is rather bullish for Ethereum in the long run. If these numbers can continue to grow, then perhaps soon Ethereum can become the global computer it has been positioning itself to be for years now. Stick with Chepicap for all Ethereum updates!