ENJ is forming a lower reversal pattern on the 4-hour chart, indicating that it is time for a rapid uptrend. This view is supported by two on-chain indicators that support ENJ’s bullish near-term future.

Investor activity indicates bullish intent

ENJ price made two equal lows at $1.34 on Jan 22 and Feb 22 revealing a lower reversal pattern known as the double bottom. The setup indicates that the downtrend is coming to an end and is likely to reverse.

However, due to the formation of a double bottom, many traders tend to go long after February 22nd and place a stop-loss order below this level. This set of stop-loss orders is called “Liquidity”.

Market makers often try to move assets into liquidity pools to construct their own liquidity. As a result, these players temporarily move the market in the opposite direction to gather liquidity. Once the goal is completed, the asset moves in the opposite direction.

Therefore, ENJ could continue falling below $1.34 before the uptrend starts. After that, the rally is expected to propel ENJ up 30% and hit the resistance barrier at $1.73.

ENJ/USD | Source: Trade View

While the technical outlook appears very optimistic, the recent surge in 1-hour active addresses adds further credence. These spikes in numbers represent investor intent or simply show that many people are rushing to buy the asset and expect the move to reverse.

Furthermore, the number of active 1-hour addresses increases when the price falls, reflecting bullish divergence. All in all, ENJ seems to have the ability to quickly skip.

Number of active addresses | Source: Santiment

The bullish outlook and investor sentiment are further bolstered by the Market Value to Real (MVRV) model. This index is used to find the average profit and loss of investors who bought ENJ in the past month.

MVRV is currently hovering around -22%, showing short-term holders are selling at a loss. However, as mentioned in previous articles, this is considered an opportunity zone as long-term investors tend to cluster in these zones as the risk of a sell-off is very low.

30-day MVRV rate | Source: Santiment

The only way to invalidate ENJ’s bullish outlook is for Bitcoin to fall again. This move could push ENJ below $1,341, invalidating the bullish thesis. Such a move could trigger panic selling among investors.

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