Crypto Update: EOS and DASH Retest Support Levels
In the last days of August, both EOS (EOS/USD) and Dash (DASH/USD) broke out from large bullish reversal patterns. The breakouts stirred a lot of excitement. Many believed that the downtrend was finally over.
As September rolled in, the sentiment quickly made a 180-degree turn. EOS and DASH showed signs of weakness. As a result, breakout rallies faded. It seemed as if these altcoins were headed back to bear territory.
However, it is not yet time to hit the panic button. In this article, we explore how these two tokens are set to retest support levels as breakout rallies fade.
EOS breached resistance of $5.80 on August 28, 2018. This enabled the market to take out the large falling wedge on the daily chart. The breakout inspired a rally that sent this cryptocurrency to as high as $6.8299 on September 1.
If you bought at the breakout, you would have grown your investments by around 17%. It’s not bad but you’d expect more from cryptos. However, if you bought near the bottom of $4.1778, you would be up by over 60%. We believe that this is the primary reason why EOS is down by over 25% for the month of September.
Daily chart of EOS
Those who bottom picked the market ignited this drop. Many of those who bought at the bottom took profits as the breakout rally faded. As heavy selling commenced, many stop losses were triggered. Those who bought the breakout had to cut their losses. As a result, EOS is trading near parabolic support of $4.60.
However, long-term investors should not wave the white flag yet. The retest of $4.60 is key to this bullish reversal. If EOS can stay above this level, it would confirm that a durable bottom is in place. That should send a strong signal that the bear run for this coin has ended.
Dash is more or less in the same boat as EOS. The altcoin broke out of a falling wedge on August 27 when it breached resistance of $180. It then rallied to as high as $224.83 on September 1. If you bought at the breakout, you would be in the green by as much as 24.91%. On the other hand, if you bottom fished the market at 130.024, you’d be up by a really nice 72.91%.
Daily chart of Dash
Similar to EOS, those who bottom picked Dash started the pullback. They took heavy profits once they detected weakness in the market. Breakout buyers became victims of profit-taking. They had to cut their losses as Dash went below $180 on September 5.
Just like EOS, long-term investors should not give up on Dash just yet. As long as it is above historic support of $135, the bullish reversal remains valid. On the contrary, this dip can be the staging ground of Dash’s bull run.
Breakout rallies have faded but it doesn’t mean that the bullish reversals of EOS and DASH were invalid. On the contrary, this selldown is an opportunity for the altcoins to either confirm a durable low is in place or generate a higher low. Whatever the case is, the breakouts remain valid as long as the markets respect the historic support levels.
Featured image courtesy of Shutterstock.