Crypto nugget: EGLD has corrected to the upside, what’s next?
In this Crypto Nugget Wednesday news, we’ll take a look at EGLD, the native token of the Elrond blockchain. The past few months have been very turbulent and the property has lost a significant portion of its value. However, he did not say the last word and has been on the rebound for several weeks. But then what is the situation since our previous property analysis? Let’s go straight to the charts to find out more.
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EGLD has reached its bullish target, the rebound is over?
After technically reacting to the contact of the green zone that we identified on the daily scale of our previous analysis, EGLD made a jump. Charging balance from an important bearish candle, the cryptocurrency has returned to key support in 2021. Currently reacting at this level, the aim is to break free from it and hope for new bullish targets.
However, if it fails, it will testify to the (temporary) presence of sellers, who want to keep this support as impregnable turning zone. It is not impossible to have a continuation of the upward trend. However, the US indices are encountering key resistances in the context of the imminent return to school, with the return of institutional investors. So if you take positions, caution is in order with rigorous risk management by avoiding full exposure to the market.
What happens in smaller units of time?
For asset analysis, my favorite time units are the weekly, daily and H4 scales. This allows you to have a good view of the trend. Then, after that, it is interesting to move to smaller time units (H1 or M15). Before moving on to the EGLD/BTC pair, let’s take a look at the daily time frame to better understand the situation against the dollar.
EGLD, rejected at the junction of technical levels
By using volume profile, we better understand the price evolution. You can see that the red zone that we identified is in conjunction with High value area, which makes it a non-negligible zone where there is profit taking as well as opening of short positions. EGLD failed to break out of this area, it is now in a downtrend. So we have to look at the POC at $56.77. If EGLD manages to maintain this level, we could consider a return to VAH.
However, if it fails to hold POC as support, the next two stops will be $50.5 and $47.50 (Value Area Low). Technically, we are in the range where it is desirable to play low and high limits. When the exit occurs, it is certain that volatility will return with a strong move. If there is a bullish exit, the first target will be $75. However, if there is a break to the downside, we will have to watch out for $30.50.
EGLD at key level against bitcoin
What we can see in relation to Bitcoin is the range in which EGLD registered for several weeks. Currently the property is at POC which is in contact with a very relevant horizontal level at which EGLD it is leaning towards being support or resistance. The rest is simple: either we will have a jump to test HAV. Or we have a bearish breakout POC which will result in returning a EGLD quite weak.
In that case it will be necessary to follow up WAL and wait for a bounce (or not at this level). We are currently at the most important level of the assortment. It should be noted that a bear breakout can be made without difficulty. This is due to the lack of technical levels to work with sellers. However, buyers will likely find it difficult to get higher with the confluence of horizontal levels and the 200 EMA quickly approaching the zone.
So, depending on the direction in which the asset moves relative to Bitcoin, it will be more or less resistant to market turbulence. For now, we have to watch how EGLD moves within its range. The volume profile is very helpful and allows us to understand the key levels where buyers and sellers are fighting. The next few weeks will therefore be important to determine a clear direction for the property to take.
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