Enjin Coin (ENJ) is showing decisive signs of a bullish reversal but has yet to break out from its short-term structure.
ENJ has been falling since reaching an all-time high of $4.84 on Nov 25. The downward movement continued until the price reached a low of $1.15 on Feb 24.
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ENJ has been moving upwards since. On March 14, it broke out from a descending wedge. The descending wedge is considered a bullish pattern, meaning that it leads to breakouts the majority of the time.
If the upward movement continues, the closest resistances would be at $2.57 and $3 respectively. These are the 0.382 and 0.5 Fib retracement resistance levels respectively.
Technical indicators on the daily time frame support the continuation of the upward movement.
Prior to the breakout, both the RSI and MACD generated significant bullish divergences (green lines). Such divergences often precede bullish trend reversals.
Since then, the RSI has moved above 50 and the MACD has nearly crossed into positive territory. Both of these are considered signs of bullish trends.
However, despite the ongoing upward movement, ENJ has yet to break out above the resistance line of an ascending parallel channel that has been in place since Feb 24.
Channels are considered corrective movements, so a breakout from them would be required in order to confirm that a trend is bullish.
A breakout would likely accelerate the rate of increase towards the previously outlined resistance levels.
ENJ wave count analysis
Cryptocurrency trader @PrinceOfElliott tweeted a chart of ENJ, stating that it is possible that the price will reach a new all-time high.
There are two main potential wave counts in play.
The first suggests that measuring from the March 2020 bottom, ENJ has completed wave four of a five-wave upward movement.
The fact that the proposed wave four is contained inside an ascending parallel channel supports this possibility.
If correct, ENJ will continue increasing towards a new all-time high price.
The second possibility suggests that ENJ has completed the entire five-wave upward movement.
In this case, the ongoing increase is part of wave B of an A-B-C structure.
In any case, a significant upward movement in the short term seems to be the most likely scenario.
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