EOS Update: Bull and Bear Scenarios

EOS (EOS/BTC) recorded one of its major lows of 0.0006914 on August 14, 2018. Since then, the market has been trading within a wide range between 0.0006914 and 0.0009544 with a midpoint or range equilibrium at 0.0008058. Retail investors buying this range are most likely accumulating. They believe that this is the bottom and EOS is currently building the base of the next bull run.

With the recent crypto carnages, however, yearly lows and accumulation ranges have either been wiped out or put into question. In the case of EOS, the market has yet to revisit its August 14 low, but with the current overwhelming bearish sentiment, it is always better to be prepared for the worst.

In this article, we reveal the possible bull and bear scenarios for EOS.

The Bull Scenario

Even in extremely bearish conditions, there’s a possibility for a few cryptocurrencies to go against the trend. We are seeing this in Ripple (XRP/BTC), Decentraland (MANA/BTC), and a few other altcoins that appear to be bucking the overall trend.

As for EOS, as long as it is above the August low, we can safely say that it is in sideways consolidation.

Nevertheless, bulls can take control of the market right now. All they have to do is to stay above the midpoint or the equilibrium and then generate a higher high (HH).

EOS bull case

A daily close above 0.0000888 may not sound like much but it can be a game-changer for the market. With a series of lower highs (LH) in place, the first higher high within the range would shift the sentiment from neutral to slightly bullish. This might embolden more bulls to consider buying the next higher low (HL). The fourth higher low within this range may be enough for bulls to break out and take control of the market.

EOS bull envisioned bull breakout

If you want to buy EOS, the smart way to do it is to keep an eye on the midpoint and wait for the higher high. Do not buy the higher high though. What you want to buy is the higher low that comes after. That would generate the bullish momentum required to break out of the range.

The Bear Scenario

While bulls have the upper hand right now as they control the midpoint of the range, bears won’t have a hard time making their presence felt. With bears rampaging in almost all cryptos, a little shove to the south can be enough to scare retail investors and force them to give up their positions.

If bears would take control of the market, it would start with a breach of the range midpoint. Once the midpoint is taken out, bears would then flip the support into resistance (S/R) as a confirmation.

Possible S/R flip

This S/R flip would send a message to the market that bears have taken over the range. The S/R flip of the range midpoint was the same strategy used by bears to take out Bitcoin’s (BTC/USD) previous support of $6,000.

Bitcoin breakdown

Like EOS, Bitcoin was also range trading for months. As soon as bears took charge of the midpoint, the market collapsed. There’s a good chance that the same may happen to EOS as those who bought within the range race to close out their positions in order to protect their capital.

Thus, one of the best ways to protect your capital is to lighten positions after the S/R flip. Then consider closing all positions once the support collapses.

Possible EOS breakdown

A range breakdown may take EOS to the weekly support of 0.0000595.

EOS weekly support areas

Bottom Line

Whenever the overall sentiment is extremely bearish, it is best to always be prepared for both bull and bear scenarios. This will enable you to make quick decisions and act based on how the market moves. For now, EOS remains neutral but that could change in the next few days.

Kiril is a CFA Charterholder and financial professional with 5+ years of experience in financial writing, analysis and product ownership. He has passed all three CFA exams on first attempt and has a bachelor's degree with a specialty in finance. Kiril’s current focus is on cryptocurrencies and funds, as he does his own crypto research and is a Product Manager at Mitre Media. He also has his personal website, InvestorAcademy.org where he teaches people about the basics of investing. His ultimate goal is to help people with limited knowledge of finance and investments to create investment portfolios easily, and in line with their unique circumstances.