Why ENJ must hold on to this support zone

A bearish crossover between the 4-hour 50-SMA (yellow) and 200-SMA (green) is expected to pile on more pressure on Enjin Coin as losses extend to a third straight day. The support region between $2.74 and $2.55 is now ENJ’s best chance at an immediate reversal as the RSI closes in on oversold territory. At the time of writing, ENJ traded at $2.77, down by 7% over the last 24 hours.

Enjin Coin 4-hour time frame

Enjin Coin was struggling to find support after a solid week between 20-27 December pushed its value by 55%. Profit-booking at $3.34 has now extended to a near 20% decline, with no pushbacks offered at $3 or $2.87. Moreover, a bearish crossover between the 50-SMA (yellow) and 200-SMA (green) is expected to pile on more pressure as investors bet against the market. However, the zone between $2.70-$2.55 could provide an avid response until the broader market recoups recent losses. In the past week, bulls initiated new longs within this zone to extend ENJ’s uptrend. The price level was also significant on the daily time frame as it was backed by the daily 50-SMA (now shown). Should ENJ slip below this area at any given point, the market would be exposed to a 15% drawdown to $2.16.

Indicators

ENJ’s indicators were yet to show signs of life. The Squeeze Momentum Indicator (SMI), which correlates market momentum and volatility, extended its decline below the half-way mark. Buyers should now wait for the next dark red bar, which would indicate that sellers are losing market control. Similarly, the RSI traded in bearish territory and continued to aid sellers. Moreover, the index had more room for losses before tagging the oversold region.

Conclusion

Those expecting to buy ENJ at cheaper price levels should need to wait further. The abovementioned factors suggested that another 5%-7% dip was likely before the market rebounds.