Article By Yaz Sheikh
The cryptocurrency behind Aeternity, Aeon, has experienced a small price hike of 1.5% over the past 24 hours of trading. Aeon is currently trading at a price of $1.94 at the time of writing, and has enjoyed a decent price increase totalling 6.01% over the past 7 trading days.
Aeternity was created in early 2017 by Vitalik Buterin’s ex-colleague, Yanislav Malahov. Malahov set out to create a platform for decentralised applications that focused mainly on increasing scalability. He proposed to combat the scalability problems seen with Ethereum by taking the smart contracts off of the blockchain and process them in “state channels” instead.
State channels are basically lines of communication between parties involved and the smart contract itself. It helps to increase scalability concerns as it takes the workload off of the blockchain improving the overall efficiency of the blockchain itself. The state channels also mean that smart contracts do not need to pay network fees every time they execute.
Along with these benefits, state channels also helps to keep the terms within the smart contract private, as the data can only be seen by the parties involved, this would greatly benefit large scale enterprise who do not wish to divulge information relating to their operations.
Aeternity is a fascinating project with many facets to its operation. For a more in-depth overview of the technology behind Aeternity, we recommend our “What is Aeternity” guide.
Aeternity is currently ranked 33rd in terms of overall market cap across the entire industry. The cryptocurrency currently has a market cap value of $458 million; however, this is still a staggering $821 million lower than the market cap high of $1.279 billion seen on April 29, 2018. Aeon has seen a price increase of 4.26% over the past 30 trading days.
Let us continue to analyze price action for Aeon, both against the USD and BTC.
AE/USD – SHORT TERM – DAILY CHART
Analyzing the market from the short life span that Aeon has been trading, we can see that price action had experienced a significant bullish run when price action started from a low of $1.15 on March 18, 2018 and rose to an all-time high priced at $6.05 on April 29, 2018. This was a 420% price increase from low to high.
After the placement of this all-time high, price action rolled over and began to depreciate. It originally found support at the .618 Fibonacci Retracement level priced at $3.02 during May but continued to fall further lower during June. This was a Fibonacci Retracement measured from the entire bullish run described above.
The market fell in June until it found support at the .886 Fibonacci Retracement priced at $1.71. We can see that for the entire trading period for July, so far price action has been trading within a range bound condition, confined between the .786 Fibonacci Retracement priced at $2.20 and the .886 Fibonacci Retracement priced at $1.71.
If the bullish momentum recently witnessed can increase and push price action above the upper boundary of the range at $2.20, then we can expect near-term resistance to come in at the .618 Fibonacci Retracement level priced at $3.02. However, it is important to highlight that the 100-day moving average is currently hovering slightly above the upper boundary of the triangle, meaning that there would need to be significant bullish momentum for price action to break above this level.
Alternatively, if the bearish momentum re-enters the market, we can expect mediate near-term support to be located at the .886 Fibonacci Retracement priced at $1.71. Further support below this level can be found at March’s low at $1.15, followed by the round number $1 handle.
The technical indicators are mildly favoring the bulls at this moment in time. The RSI is currently trading slightly above the 50 handle indicating that the bullish momentum is increasing slightly. If the RSI can stay above the 50 handle, we can expect the bullish momentum in the market to continue.
Similarly, the moving averages are currently trading in a very narrow range. If the 7-day EMA ( blue line) can cross up above the 21-day EMA (purple line) this would constitute a bullish crossover and the bullish pressure within the market should continue.
Let us continue to analyze the price of Aeon relative to BTC over the same period.
AE/BTC – SHORT TERM – DAILY CHART
Analyzing the market relative to Bitcoin, we can see that Aeon price action surged from a low of 1,910 SATS on April 4, 2018 and rose to an all-time high of 6,333 SATS on April 2,9 2018. This was a price increase of around 230% from low to high.
During May, price action remained relatively stable, staying above the .50 Fibonacci Retracement level priced at 4,106 SATS for the majority of the month. This is a Fibonacci Retracement measured from the bullish run described above. However, the market failed to hold this position and fell lower during June until it found support at the .786 Fibonacci Retracement priced at 2,851 SATS. During this bearish drop, price action also fell below the 100-day moving average.
As July started, price action fell further to where it is currently trading at support located at the .886 Fibonacci Retracement, priced at 2,413 SATS. We can also see that this support level is bolstered by the 1.618 Fibonacci Extension level priced at 2,367 SATS.
If the bullish momentum can once again pick up within this market, we can expect near-term resistance to be located at the .786 Fibonacci Retracement priced at 2,851 SATS. Further resistance is expected at the .618 Fibonacci Retracement, priced at 3,588 SATS.
The technical indicators within this market are heavily favoring the bears at this moment in time. The RSI is trading well below the 50 handle, near oversold conditions at 20. If we are expect the bullish momentum to pick up within this market, we will need to see the RSI break back above the 50 handle.