During the past weeks, we saw a major downward move in EOS from well above the $15.00 level. The price trimmed most of it’s this year gains and declined below the $10.00 support.
The daily chart of EOS/USD indicates that the price cleared the 76.4% Fibonacci retracement level of the ride from the $3.96 low to $23.22 high, opening the doors for a complete test of $3.96.
The price is now well below the $8.50 pivot level and the 50-day simple moving average, which is a strong bearish sign. More importantly, the price is following a declining channel in place with resistance at $6.10 on the daily chart.
However, the price is now approaching a crucial support zone near $3.50-4.00, which is the base for the last major ride from of more than $15.00. Therefore, there are high chances of buyers taking a stand near the $3.50-4.00 zone.
In the worst case scenario, there could be a nasty spike below the $3.50 support zone before the price stages a recovery. On the upside, a break above the channel support at $6.10 is needed for a decent recovery.
Above the channel resistance, the 50-day SMA is positioned at $8.00 to act as a major barrier. If EOS buyers succeed in pushing the price back above $8.00-8.50, it will most likely move into a bullish zone.
In the short term, the price may well decline further towards $3.50-3.90 since the market sentiment is very bearish. However, in the medium term, EOS is reaching important supports and buy levels above $3.00. The daily RSI for EOS/USD is near levels (20) not seen during the past few months, indicating a strong oversold condition.