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Enjin [$ENJ] saw a sizeable short-term rally to get the week off to a good start. On the 18th and 19th of May, $ENJ rallied by 27.5% at its peak, moving from $0.040 to $0.051.
These short-term gains were not isolated. A month ago, the altcoin had rallied 450% within two weeks to set up a higher timeframe bullish bias. These gains occurred on the back of heavy spot trading volume and easily overcame nearby swing highs that were expected to serve as resistance.
The internal structure of $ENJ has not yet shifted bullishly. A move beyond the $0.0536 local high is needed to bring about such a change. The rally at the start of this week tried, and failed, to breach the $0.0517 resistance level.
Is the Enjin retracement over?
That depends on whether traders can read it as a structural break on the 4‑hour chart. Technically, it was a break, with a session close above the previous lower high. Yet, the volume trends during and after the move, combined with the large upside candlewick, indicated a swing failure pattern.
At the time of writing, $ENJ exhibited a bullish reaction from the 61.8% retracement level at $0.0445. Yet, traders should be careful not to FOMO into long positions.
It is still possible that $ENJ retraces to $0.042 or even below $0.04. The rally at the beginning of the week resembled a liquidity sweep more than a structural shift.
After sweeping the $0.05 liquidity, the price moved into long liquidations clustered around $0.045. Once the zone down to $0.0432 is cleared, the chances of an $ENJ rally improve.
Yet, buyers must remain cautious. This was not yet an obvious buying opportunity. It might be better to wait for a cleaner structural break instead of chasing the price.
Final Summary
- Enjin’s mid-April rally has set up the potential for another rally, but the one earlier this week might not be it.
- The liquidation heatmap and the failure to exert a clean structural break threatened a deeper $ENJ price retreat in the short-term.
blockchainreporter.net