You have probably heard about Elrond already considering it is one of the best performing altcoins in 2020. Elrond is a blockchain capable of achieving high scalability with a lot of speed built specifically for internet-scale.
The Elrond Mainnet is set to launch in around 12 days before the end of July. While this event is definitely notable, it is obviously not big enough to cause a 3,300% price surge within a few months.
What exactly happened with Elrond?
After a massive spike on Binance when ERD started trading, the digital asset went into consolidation mode and slowly dropped from $0.007 towards $0.0015 in the next few months. On January 1, 2020, ERD was trading at around $0.0018 and kept dropping until the crypto crash of March 13 reaching an all-time low of $0.00055.
Things were clearly not looking good for ERD, however, after the market started recovering, Elrond not only recovered but absolutely blasted through all resistance levels hitting $0.003 on June 3, only 3 months later.
While this surge seemed already big enough, ERD simply continued climbing and reached $0.0065 on June 20, only two weeks later. Again, selling pressure was mounting and practically all indicators were showing ERD being overextended but that didn’t stop the bulls from hitting $0.0166 only a month later.
This is by far one of the most impressive altcoin runs this year, in fact, it is probably the best considering its trading volume and market capitalization.
Elrond went from a small market capitalization of $7.9 million to a peak of $219 million climbing above the top 50 coins.
What are the red flags?
Considering the magnitude of the bull rally, even a 50% drop would be ‘reasonable’. For now, the daily uptrend continues even though ERD is already down 22% since its peak.
The daily 12-EMA at $0.0128 is the closest most important support level. ERD has stayed above this support level for more than a month. A loss of the 12-EMA would be notable but far from the end of ERD’s run.
The next support would be $0.01 which is the 26-EMA and a psychological level but even a loss of this level would not necessarily be the end of the run. The daily RSI has already cooled off and we could easily see another leg up soon.
The fact that ERD’s trading volume has declined after a few bearish candlesticks, indicates that sellers aren’t that strong. The daily MACD is getting close to a bear cross, however, FOMO is simply too strong right now for it to matter.
The most important support level for ERD is definitely $0.0056, of course, a drop below this level would be quite a big red flag. It’s important to note that even at $0.005, ERD would be 580% higher than what it was in April 2020.
Bears are basically looking for increasing bearish volume while cracking both daily EMAs and optimally the $0.01 zone. For now, the DeFi craze continues and the Mainnet hasn’t even been launched yet. There is a chance that the launch creates a classic scenario of ‘buy the rumor, sell the news’ but it’s unlikely considering how many people want to buy ERD right now.
You might also like
More from Altcoin
With the falling dominance of BTC, being able to diversify is starting to make sense. In today's crypto crash scenario, …