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It's good to be back after such a long hiatus. What did we miss? Nothing short of a major late summer rally! That was fun... because in crypto rallies, honestly it's hard to lose and they cover up a lot of mistakes. Traders might learn more in bear markets.
Telos broke out of relative anonymity in August to rally over 500% off mid-summer consolidation lows. Anything moving quickly from $0.15 to $1.04 is going to need a cooling-off period as investors learn to cope with the new price levels. After watching a potential cup and handle pattern bust, we have been treated to a fairly textbook example of an ABC retracement:
Right off the top, I want to call your attention to two points: First, today's drop has carried price into the 50-day EMA zone. Second, volume is trailing off as the rally and retracement pattern exhaust but remains much higher than it was early this summer.
At some point, TLOS was going to have to become reacquainted with her 50-day EMA. the 50-day EMA functions like a magnet attracting price. Price can diverge one way or the other based on sentiment, but it will always come home to its 50-day average. I'll use BX, which trades on Wall Street as an example:
Blackstone (BX) is one of the true gems on Wall Street over the past decade, it's printed gains over 250% over the last five years and continues to show strength. Recently, a $3B deal with Soho, a Chinese real estate firm fell through because Soho failed to meet preconditions of the sale. This sent price reeling and it bounced off of it's 50-day EMA. You can see how the stock has rallied since March, that trend line extends off the March 8 low. Even BX manages to find it's 50-day EMA sometimes.
Jumping back to TLOS and zooming in on the 1H chart, we can see the ABC correction in detail. We can also see price falling below the 800 EMA on the 1H. In a bull market, that's a pretty clear entry point.
If we do the math off the August rally, the .5 Fib line falls right around $0.57. In a bull market, price will bounce off the .5 Fib retrace line and rally. We haven't even made it that far down, yet. Will we?
When it comes to TLOS, it's really hard to imagine this is going to the .618 line, but, if it can not find support at .57555, it's a real possibility. More likely, we should look for confirmation of a bounce in the current zone and then look for the emergence of a new pattern. That $1.04 ATH is safe, for now. However, a sustained rally off the .5 Fib could call that into question. As the world catches its breath after reading that China has banned crypto and crypto exchanges, they'll realize that Telos is still "#RealWorldReady" and the "#GreenestBlockchain." Telos can still handle over 10,000 transactions per second with less energy than any serious competitor. The network is still growing and the new Ethereum Virtual Machine is the best in the business, as well as the safest, as audit findings revealed.
We'll be watching price closely as the market reacts to the latest FUD from China. Happy trading folks! Remember, never invest any money you can not afford to lost. Also, bear in mind, this is technical analysis that you are reading, not financial advice. Invest, and drink, responsibly!
