EOS (EOS) is one of the biggest gainers in the last 24-hours. In this period, it has shot up by over 30%, outpacing all the other top 20 cryptos though they are all in the green. So what triggered this rise? Well, like the rest of the market, nothing magnanimous happened on the fundamentals side of things. However, from a technical perspective, this is a case of a short squeeze. The number of EOS shorts has been on the rise for some time now. This indicates that short sellers believed that EOS could test even lower lows, and this massive pump has squeezed them out.
However, many of them are still adding to their short position. At the time of writing, the number of shorts on EOS has shot up to 55% of the total trading volumes. This is an indicator that short sellers still believe that this pump could be short-lived. As such, for this to turn into a full-blown bull rally, EOS needs to break above the 1-day 200-day MA at $4.167. Failure to do this, and short sellers could take back control of the market, and drive EOS back to its pre-pump levels. Such a move would turn this pump into a bull trap, and buyers would be rekkt.
Nonetheless, there is a good chance that EOS could sustain this rally, even if there is a correction in the near-term. That’s because Bitcoin seems to be respecting the 200-day MA on the weekly chart at $3200. If it holds above it, like it is doing at the moment, then there is a good chance that Bitcoin (BTC) is already at the bottom, and could be headed into a bull market. It may not be an exponential rise, but possibly a slow rise back to the top. This will most likely lead to exponential growth in all major altcoins. Altcoins have proven this analogy to be true in the past, and it is likely to hold true going into the future.
In fact, even the current pump was the result of Bitcoin’s pump that saw it rise from $3600 to its current price of $3900. Had it not pumped, there is a possibility that most altcoins, including EOS, would have remained depressed. As such, the key factor at this point is Bitcoin. If this pump holds Bitcoin above the 1-day 100-day MA at $3980, there is a good chance that Bitcoin (BTC) could sustain this rally. By extension, this means that EOS (EOS) could test $5 to $6 in the near-term.
From a long term perspective, fundamentals will be the key driving force for EOS (EOS). This is one of the most scalable blockchains and is perfectly suited for enterprise applications. This places it in a good position to dominate the Dapps ecosystem. Already EOS is leading in Dapps, and high-quality one at that, some of them related to the space industry. That’s a characteristic of a blockchain that has what it takes to rise significantly in the future. EOS (EOS)’s future looks good, and it’s highly undervalued at current prices.