EGLD Headed Back Above 0 as the Bulls Take Charge

Elrond (EGLD/USD) has been on a tear over the course of the last two sessions. After bouncing at a significant area of support in the $220s on Monday, the cryptocurrency has now surged as high as the $270s, a more than 20% rally. EGLD/USD is now probing last Friday’s highs at $280, though still has some way to go to recover back to last week’s double top in the $315 area.

Short-term bullish breakout

The latest push high comes amid a surge in technical buying after Elrond broke to the north of a significant medium-term downtrend that had been capping the price action all the way back to the November 23 record high. Since then, EGLD has pulled back from nearly $550 per token, so at Monday’s lows, that amounted to a drawdown of nearly 60%.

But the recent bullish break signifies that the recent bearish trend is over, for the time being at least. Short-term technical bulls will be targetting a test of last week’s double top around $315 and then on an even more significant area of resistance just above it in the $320-$340 area. This has been a significant balance area (of both support and resistance) in recent months, is where the 21 and 50-day moving averages reside and coincides with an important uptrend that Elrond fell below in early December.

EGLD breaks above key downtrend, eyes move above $300. Source: FXEmpire

If the bulls can push the cryptocurrency back to the north of this area, there wouldn’t be much (technically speaking) to prevent a rally all the way back to record levels.

Long-term bearish risk

But pushing above the $320-$340 zone will be a significant battle as many longer-term bears may see a recovery to this area as a good re-entry point to load up on shorts. The early December break below the long-term uptrend that has supported EGLD/USD price action going all the way back to mid-July signified and end to the Q3 to early Q4 bull run.

The implication is that EGLD has likely re-entered a period of consolidation. Failure to recover back to the $320-$340 region and to break above it would be a confirmatory signal. Long-term bears, or traders just seeking to “play the range” may use such a recovery as an entry point to ride EGLD all the way back to recent lows in the $220s. Indeed, $220-$340 could well become the medium-term range.

But EGLD below long-term uptrend. Source: FXEmpire

Just as a break above this range would open the door to a return to record highs in the mid-$500s, a break below this range would signal a move back under $100 towards early summer lows in the $50s-$60s would be on the cards.

News Source

جواب چھوڑ دیں

براہ مہربانی اپنی رائے درج کریں!
اپنا نام یہاں درج کریں