Enjin Coin is currently fighting a heavy downward trend. The token, which trades at $0.3228, broke through its support level at $0.3311. This article provides a technical analysis of the most relevant indicators (4-hour chart). Furthermore, it discusses why we expect a further price drop in the 5-8% region over the next few days, pushing the coin toward a price range of $0.3142 – $0.295.
Enjin Coin — Indicators
The technical landscape for ENJ paints a rather sad picture.
To begin with, both the Simple Moving Average (SMA) and the Exponential Moving Average (EMA) are significantly bearish. These crucial trend indicators, designed to smooth out price fluctuations and help identify the direction of the market trend, show a solid downward trajectory across all time horizons—short, medium, and long-term. This means that, at least for now, the downtrend is the dominant force in the market.
Turning our attention to the momentum indicators, the situation is similarly bearish. The Moving Average Convergence Divergence (MACD) – a trend-following momentum indicator that shows the relationship between two moving averages of a token’s price – also signals a bearish phase for ENJ. The MACD line crossing below the signal line typically signifies a bearish selling opportunity.
In tandem with the MACD, the Ultimate Oscillator, which weighs buying or selling pressure over three different timeframes, also leans towards a bearish trend. This points to negative momentum and, potentially, more price decline in the near term.
RSI Signals An Overbought Situation
Interestingly, amidst this bearish environment, the Relative Strength Index (RSI) seems to buck the trend by signaling that ENJ is in an oversold condition. The RSI, a momentum oscillator that measures the speed and change of price movements, usually flags an oversold condition as a potential buying opportunity. However, considering the overwhelmingly bearish sentiment echoed by the other indicators, this oversold signal should be interpreted cautiously. It might represent a temporary undervaluation but does not necessarily mean an imminent bullish reversal.
ADX is Weak
Finally, the weak Average Directional Index (ADX) reading warrants attention. The ADX measures the strength of a trend, and a low reading could mean that the market lacks a powerful directional force. This suggests that ENJ’s current downtrend may lack the impetus for a quick reversal, thus reinforcing the overarching bearish outlook. In this uncertain environment, it is prudent for investors and traders to exercise caution and vigilance.
Enjin Coin — Setting Up the Trade
Given these signals, trading ENJ at this point can be risky. However, for those who wish to take on the risk and potentially capitalize on the forecasted price drop, here’s the potential setup:
Investors may consider entering a short position but should monitor it closely and adhere to solid risk management principles, including setting definitive stop-loss orders and clear take-profit targets. For example, an initial take-profit goal could be $0.31, aligning with the lower end of our expected price drop.
If the market continues its bearish swing, a second target just above $0.30 can be set. However, in the bearish momentum persists, traders could opt to leave a portion of the position open with a final target of $0.29.
In conclusion, it’s crucial to note that while we foresee a 5-8% drop in ENJ’s price, cryptocurrency markets are notoriously volatile. Thus, this forecast should not replace individual research and risk assessment. It’s paramount to stay updated with market news, particularly news directly impacting ENJ, and adjust your trading strategies accordingly. Good luck, and trade wisely!
About Enjin Coin
Enjin Coin (ENJ) is a digital asset native to the Enjin blockchain platform geared towards video game and digital content developers. It enables users to manage, distribute, and trade virtual goods, making it easier for developers to monetize their content.
The Enjin platform provides a robust infrastructure for creating and managing blockchain games without the complexity of building and maintaining any blockchain infrastructure or writing blockchain-related code. ENJ serves as the backbone of this ecosystem, offering both a method of value and verification within this digital goods marketplace. As of mid-2023, it’s becoming increasingly popular in the gaming and digital content communities due to its potential to revolutionize in-game economies.