News that the EOS Jungle Testnet recently suffered an attack and was shut down for at least a day as the network resolved the problem weighed on prices, although most cryptocurrencies have already had a rough start to the week.
This is being pinned on the SEC decision to suspend trading in a couple of crypto-based securities, dampening hopes of seeing a bitcoin ETF approved by the regulator anytime soon. With that, other altcoins could also see a much longer way off in terms of getting ETFs of their own.
EOS has formed lower highs and lower lows to trade inside a descending channel on its 4-hour time frame. Price has bounced off the resistance and is currently down to the mid-channel area of interest.
The 100 SMA crossed above the longer-term 200 SMA, however, indicating that the path of least resistance is to the upside. In other words, support is more likely to hold than to break or bullish momentum might take over and lead to a reversal from the slide.
EOS is also testing the lows around the 38.2% Fib extension level and a continuation of the drop could lead to a test of the 4.0000 major psychological mark at the 61.8% Fib and channel support. Stronger selling pressure might lead to a move to the 78.6% extension at 3.2151 or the full extension at 2.2154.
RSI is pointing up, though, so there may be some bullish pressure left. Stochastic, on the other hand, looks ready to move south without even hitting overbought levels, indicating that sellers are eager to jump in.
A strong pickup in bullish momentum, on the other hand, could spur a break past the 7.0000 area of interest and create a double bottom. This is a classic reversal signal that could mean more gains are in the cards, possibly leading to a climb that’s the same height as the chart formation.