Many mid-cap altcoins have been burning up the charts recently (LINK, BAT for example), even as the big boys have been throttled by Bitcoin’s new downtrend. As perhaps the smallest large-cap altcoin, EOS has been riding the bottom of its BTC-paired chart for several months getting no love. But a bottom may have been found, and we go to the charts to review the evidence.
Starting on the 3-day EOS/BTC pairing, we first notice a lengthy development of bull divergences on the RSI. On such a large chart, this suggests that a bottom has been found -- and the only thing we lack here is a higher low on the swing lows. The EMAs have started to flatten, with the 8 EMA going sideways all through September until the present.
The histogram has spent a lot of time on the positive side, and is currently trending down. But as long as the RSI trendline holds, we can still make the case for a bottom having been found -- which is to say we might not even get a higher low on the next swing down.
Moving to the daily USD pairing, we see that EOS has likely not found a bottom to its short term market cycle. The histogram looks ready to roll over to the negative side, suggesting more downside; and thus, we can’t say for sure if the RSI will put in a divergence. We can also observe that volume (Coinbase) has not been impressive in general, with the only spike being during the big Bitcoin dump from $10k. There is not enough here to tell what is happening.
Finally, going to the 4-hour USDT pairing for the short term view, we see that EOS is currently finishing up its second significant dump of the week -- moving in step with Bitcoin -- into support from last month.
On this timeframe, sell pressure seems to be fading, with a generally lower sell volume picture as the weekend looms. The histogram is arching back up, and if it does roll back up in the coming days we might see a long opportunity. The RSI looks like it’s putting in a bull divergence, although we must first confirm that the dip is complete.
Overall, EOS needs a lot of work. This is a good place to accumulate for value investors, but traders may need more medium-term strength to consider buying. On the extremely long timeframes, however, we might consider a bottom likely in, and the potential for a double bottom is clear. We'll have to see.
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