EOS entered a correction phase on April 30th during which the price fell by over 27%. The smart contract token went from a high of $ 3.1 to a low of $ 2.3.
Despite the significant downward momentum, the data shows that large investors pile up EOS with every slump. If history repeats itself, it could be a sign that Ethereum’s rival is on the verge of a significant move higher.
Whales fill their EOS pockets
Santiment, a behavior analysis platform, found in a recent report that something seems to be brewing with EOS. The company confirmed that there is an inverse correlation between “investors / baby whales” and “the big ones”.
“During retail [investors] distributed EOS, whales accumulated, ”said Santiment.
In fact, on-chain metrics show that the number of addresses with 100,000 to 1,000,000 EOS began to grow on February 9 of this year. Since then, the number of whales behind this cryptocurrency has increased by 20% and the trend continues.
EOS holder distribution. (Source: Santiment)
Although the reasons for this behavior are unknown, EOS has shown robust development activity over the past few months. The development community behind this blockchain protocol continues to make efforts to expand the usefulness of its token despite the uncertainty in the global financial system.
Development activity isn’t necessarily a good leading indicator of price, but it does add legitimacy to these projects, set in a fraud-ridden industry.
EOS development activity. (Source: Santiment)
With EOS consolidating its network and whales rushing to get a piece of it, the price appears to be ready.
An upswing on the horizon
The Tom Demark (TD) Sequential Indicator is currently presenting a buy-signal on the EOS 1-day chart. The bullish formation developed in the form of a red nine-candle. An increase in demand around the current price level could help confirm this signal.
If this should happen, the TD setup estimates that this altcoin could be pegged for a one to four candlestick rally or the start of a new up countdown.
The TD Sequential Index gives a buy-signal for EOS. (Source: TradingView)
The retracement that EOS has been through since late April added to the bullish outlook and allowed it to hit the 50% Fibonacci retracement level.
Based on Gann’s 50% retracement theory, this Fibonacci level provides a crucial “buy the dip” opportunity. If EOS can bounce off this area with enough buying pressure, it could rise quickly and make higher highs.
EOS is held at the 50% Fib level. (Source: TradingView)
Nonetheless, market participants must be wary of the dangers that arise if they fall below the 50% Fibonacci retracement level. If that support barrier fails to hold the price of EOS, it could trigger a massive sell-off pushing this cryptocurrency to the Black Thursday low of $ 1.42.
Featured image from Unsplash
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