While Bitcoin decouples from the rest of the market, altcoins are lurking without any major price action. Even though some cryptocurrencies that have rallied over the last few days, such as Matic, Harmony and Lisk, most of the altcoins in the cryptocurrency industry have been consolidating. This technical analysis will explore how EOS, Stellar, and Tezos have performed recently and whether they have the potential to surge or plummet.
Following the peak of $8.65 on May 31, EOS plunged 62 percent to reach a low of $3.30 on July 16. Since then, this cryptocurrency has been consolidating between $4 and $4.60 without any clear signs of a breakout.
Based on the 3-day chart, EOS reached the 61.8 and 65 percent Fibonacci retracement level, which is considered the ‘golden’ retracement area. This Fibonacci retracement zone represents a pivotal point for EOS’s trend. A significant correction, like the one just experienced to this area, suggests a rebound. However, a break below the golden retracement level is a signal of trend reversal from bullish to bearish.
EOS/USD by TradingView
As a result, the Bollinger bands on the 1-day chart may clarify if EOS is bound for a rebound or to continue declining. Under this timeframe, the Bollinger bands are squeezing which indicates EOS has entered a consolidation phase, which is usually followed by a period of high volatility. The longer the squeeze the higher the probability of a strong breakout. Thus, the range between $4 and $4.60 is a reasonable no-trade zone.
Meanwhile, a break above $4.60 could lead to an upswing to the 50 or even the 38.2 percent Fibonacci retracement level.