Over the past 3 days, EOS has risen significantly and has managed to take over Litecoin in market cap rankings to claim the 5th position.
For reference, here’s how the market cap rankings looked on May 26, 2019:
And this is how it looks today;
As we can see, both cryptocurrencies have surged significantly and increased their respective market caps. However, EOS has managed to increase at a faster rate than Litecoin, allowing it to take the 5th position, as it presently holds a $7.3 billion market cap valuation, around $167 million ahead of Litecoin.
Although both projects have seen a 26% price surge over the past 7 trading days, EOS has managed to increase by 67% over the past 30 trading days, whereas Litecoin managed a still very impressive 58% price increase.
The recent EOS price surge comes days before the expected “big announcement” from the EOS development team. The team have been teasing about this announcement for quite some time now, however, nobody outside of the EOS development team has any idea about what is going on.
It seems that everybody is buying the rumor on the run-up toward the June 1 announcement date. More fuel has been thrown on the fire recently after EOS.IO announced that they have purchased over $20 million worth of RAM on the EOS network in the build-up toward the announcement.
Furthermore, Block.One, the company that develops the EOS.IO software, recently came out to state that they will be buying back over 10% of their stock at a valuation of $1,500 per stock. This speaks volumes to the confidence that Block.One has in the future of EOS which has helped spur the recent price surge further higher.
Let us continue to take a look at the EOS/USD market and highlight some potential areas of resistance in the run-up toward the big announcement.
EOS Price Analysis
EOS/USD – MEDIUM TERM – DAILY CHART
What Has Been Going On?
Taking a look at the EOS/USD daily chart above, we can see that during May 2019 EOS surged by a total of 79% from low to high over the course of the month. The cryptocurrency experienced resistance during the month at the $6.52 level and was unable to break above this level until recently.
Over the past 4 days, EOS has surged through the aforementioned resistance at $6.52 and continued further higher to run into resistance at the highlighted short-term 1.618 Fibonacci Extension level (drawn in purple), priced at $8.13.
As the market reached this area of resistance, the increase slowed in pace.
What Is the Current Trend?
The current trend for EOS/USD is 100% bullish at this moment in time. For this bullish market to be considered invalidated, we would need to see EOS fall and drop beneath the $6.52 support level.
Where Can the Market Head in the Run Up Toward the Announcement?
If the buying pressure can cause EOS/USD to break above the current resistance at the $8.13 level, we can expect immediate higher resistance above to be located at the long term bearish .5 Fibonacci Retracement level (drawn in red) priced at $8.58. This bearish Fibonacci Retracement level is measured from the June 2018 high to the December 2018 low. Above this, immediate resistance follows at $8.80 and $8.98.
If the buyers can continue to power further beyond the $9.00 level, we can then expect higher resistance above to be located at $9.44, $9.95 and $10.00. Above $10.00, higher resistance can then be found at the bearish .618 Fibonacci Extension level (drawn in red) priced at $10.22.
What If Everybody Sells The News?
Typically in the cryptocurrency markets, traders will buy the rumor and sell on the news. However, in the case of EOS, there have been times where price continues to increase post-announcement;
The fact that https://t.co/a48NDAuSrp did a massive buy back of shares makes me think they’ve got a big announcement up their sleeve on June 1.
I always buy the rumor, sell the news but I’ve seen $EOS run even after news events.
I will use a trailing stop to manage risk though
— Jacob Canfield (@JacobCanfield) May 27, 2019
However, if the sellers do step in before or after the announcement, we can expect immediate support beneath the market to be located at the $7.50, $7.34, $7.00, $6.93, and $6.52. As the $6.52 level had provided strong resistance during May 2019, we can expect it to now provide strong support moving forward.
Beneath $6.52, further support lies at $6.00, $5.84, and $5.32.
What Are the Technical Indicators Showing?
The RSI has recently reached overbought conditions and has turned downward. However, the RSI can remain in overbought conditions for extended periods of time so we can expect the momentum to remain in the hands of the bulls in the run-up toward the announcement.
EOS should continue to increase further over the next few days in the run-up to the “big announcement” on June 1, 2019. The EOS development team seem pretty confident in their announcement after buying back a large amount of stock and purchasing over $20 million of RAM on the EOS network.
However, traders should be cautious, as investors tend to buy rumors in the cryptocurrency space, only to sell their bags on the date of the announcement.