This article is an update from the previous technical analysis of MultiversX (EGLD).
MultiversX (EGLD) has been in a series of lower highs and lower lows, prompting us to embark on a thorough technical analysis to assess whether EGLD has the potential to recover from its recent dips.
With EGLD‘s market dynamics in focus, this analysis aims to shed light on its current situation and potential future directions.
Examining the daily chart of EGLD, a notable event occurred on August 17th when the price experienced a sharp decline, marked by a massive wick below. Typically, such extended wicks precede a retracement followed by a continuation of the downtrend. The ongoing price action seems to validate this notion, as EGLD works to fill the void left by the dramatic wick.
The possibility of a short-term relief rally remains, hinting at a potential upside move to retest the resistance level around $28.66. In a more optimistic scenario, EGLD could reattempt to breach the major descending resistance trend line that has been a formidable barrier since earlier this year.
In essence, the chart demonstrates the persistence of lower lows and lower highs, establishing a long-term downtrend. The absence of significant breakthroughs in resistance levels keeps the potential for bullish targets at bay. In case the downturn continues, the price could experience a correction towards the $20.17 range.
The daily Relative Strength Index (RSI) reveals that EGLD is currently situated within the oversold region. Historically, entry into this support block has often led to subsequent upside movements. This scenario could offer short to midterm swing trading opportunities for those considering buying and selling positions.
Notably, a resistance trend line and a support trend line are discernible, forming what appears to be a broadening descending wedge pattern. As the pattern extends downward, its width increases, indicative of the widening price volatility.
Furthermore, the cryptocurrency is considerably distanced from the 20 Exponential Moving Average (EMA), hinting at a potential upward retracement in the coming weeks.
In the longer term, a possible bounce from the resistance of the broadening descending wedge might transpire. This trend line has played a pivotal role in limiting price movement since August of the previous year. However, breaking above this resistance remains a formidable challenge and a signal of significant bullish strength.
The weekly RSI reinforces the notion of potential reversals. Its current positioning in the oversold territory mirrors levels not observed since December of the prior year. This pattern holds historical significance, as past bounces off the support block have led to subsequent upward trends.
The weekly stochastic oscillator aligns with the oversold region, mirroring trends reminiscent of May’s capitulation. Drawing parallels to historical data, the potential for EGLD’s price to stabilize may potentially begin a gradual ascent.
The weekly Moving Average Convergence Divergence (MACD) signals a bearish cross, a phenomenon last observed in December last year. Past instances of bearish crosses have often heralded extended downward movements. While historical repetition isn’t guaranteed, it underscores the potential for further downward movement in the near term.
The technical analysis of MultiversX (EGLD) uncovers a complex landscape of lower lows and potential reversal indicators. While various signals suggest the possibility of short-term recoveries and relief rallies, the overarching trend remains one of sustained downtrend, painting a picture of cautious optimism amid a challenging market environment.
As always, traders and investors alike must remain vigilant and adaptive in response to the ever-changing crypto space.
Rickie Sanchez is an article writer specializing in cryptocurrency news. Since late 2017, he has been actively investing in cryptocurrencies. He is enthusiastic about everything that has to do with crypto and he hopes that the readers of his articles in the years to come will gain a massive understanding of blockchain technology.