Is EOS the next major cryptocurrency to break away from the pack? The digital coin, launched in mid 2017, seems to be poised for record highs, according to a recent report by Coindesk. As of this writing, EOS is the fifth-largest digital currency by market cap and is trading for just over $17 per token. The record high was $23.03, achieved on the Bitfinex exchange on April 29. Following that high, EOS fell to $15.71, a 38.2% Fibonacci retracement from a March 18 rally that yielded the April 29 high. Could this example of one of technical analysis' "golden ratios" be an indication that EOS is poised for greater heights to come?
Could 38.2% Support Level Hold?
A 38.2% Fibonacci retracement is often seen as one of three golden ratios used in technical analysis. The others are 50% and 61.8%. These are usually considered to be strong support/resistance levels; if a price breaks below the 38.2% level, then the next threshold is 50%, followed by 61.8%, and so on.
On the other hand, if the 38.2% support level manages to hold, it's often seen as a sign that a price pullback has run its course. EOS has managed to stay within the confines of the 38.2% support level. It reached this point around May 1 and has spent the past week or so hovering just above that threshold. At the same time, daily trading volumes have dropped significantly; this could suggest that the reason for the price pullback has to do with investors looking to take profits.
Coindesk analysts believe that "long-run momentum studies are biased bullish," with EOS sitting well above levels for 20- and 50-day moving averages (MAs).
What's in Store?
EOS could retest the $20 mark in the coming days. If it manages to pass that threshold, a rally might take place, bringing the value above the $23.03 high from earlier in the year. The cryptocurrency is also planning a main-net launch for June 2. This event is highly anticipated by investors and the broader digital currency community and could help to push the value above the previous high as well.
