The Elrond price set a new record of $298.77 on Sunday, capping an incredible five-day winning streak which added more than 140% to EGLD. However, this morning EGLD is tracking lower as the crypto market recovery is starting to look fractious. Some assets are hitting new highs, while others are treading water, but the big boys are turning lower.
Despite general malaise in the market, Elrond (EGLD/USD), like Algorand (ALGO/USD), jumped in the last 24-hours. And similarly to ALGO, EGLD looks ripe for a correction. Over the last week, the correlation between crypto-assets is starting to break down. Typically, the market tends to move in unison. If Bitcoin (BTC/USD) goes up, so does Ethereum (ETH/USD), lifting the balance of altcoins with it. However recently. BTC and ETH have started to roll over. And I believe this weakness will start to seep into alts.
The cryptocurrency market has wandered from theme to theme over the last year. At the end of 2020, the bull case was with inflation and rampant money printing. DeFi ruled the roost early this year, but now investors have moved on to scaling solutions, proof-of-stake blockchains, and NFT platforms. High gas fees on the Ethereum network have proved beneficial to low-cost, high-speed blockchains such as Elrond. As a result, the Elrond price has vastly out-performed Ethereum. Since June, Elrond’s market cap has surged from $1b to more than $5b this morning, which has lifted ELGD to become the 32nd largest cryptocurrency. However, it has also lifted the Elrond price deep into overbought territory, which may set the coin up for a fall.
EGLD Price Forecast
The daily chart shows that yesterday, Elrond price jumped to a new record of $298.77, exceeding the previous all-time high of $251.25 by around 20%. Although, since then, ELGD has started to pull back and is last trading around $260.
However, despite some air coming out of the rally, the Relative Strength Index (RSI) remains extremely elevated, and at 77.76 suggests a correction is possible.
For now, ELGD is firmly in bull mode, and as long as the price stays above the former high, it may go on to set a new record. However, if the price starts to break down below $250, it could trigger long liquidation. In this event, the price could succumb to a sharp decline.
Furthermore, the recent uptick has not been accompanied by a surge in trading volume, which suggests the rally has been retail-driven. Retail traders, especially those using leverage, often have a low pain threshold. Therefore, if the price starts to move lower, retails stop-loss orders could exaggerate the decline and force the Elrond price down to the September 1st low of $190.00.
In saying that cryptocurrencies have a habit of disrespecting the RSI, and on that basis, should EGLD breach $300, it will invalidate the bearish view and suggest melt-up even deeper into overbought conditions.
Elrond Price Chart (Daily)
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