ENJ's Uptrend Prospects Dim: A Dip Below $0.043 Could Be Catastrophic

The cryptocurrency market witnessed a notable surge in Enjin's price, with the token experiencing a substantial 27.5% increase between May 18th and 19th, rising from $0.040 to $0.051. This recent upswing is not an isolated event, as the altcoin had previously demonstrated a remarkable 450% gain over a two-week period approximately a month ago. The significant price movement was fueled by intense spot trading activity, effortlessly surpassing nearby resistance levels.

However, a closer examination of Enjin's internal structure reveals that a bullish shift has yet to occur. To trigger such a change, the token's price must surpass the $0.0536 local high. The recent rally attempted to breach the $0.0517 resistance level but ultimately fell short. As of now, the question remains whether the Enjin retracement has come to an end.

The answer to this question lies in the ability of traders to identify a structural break on the 4-hour chart. Although the session close above the previous lower high technically constitutes a break, the accompanying volume trends and the large upside candlewick suggest a swing failure pattern. Currently, Enjin is exhibiting a bullish reaction from the 61.8% retracement level at $0.0445. Nevertheless, traders should exercise caution to avoid succumbing to fear of missing out (FOMO) and entering long positions prematurely.

It is still possible for Enjin's price to retract to $0.042 or even below $0.04, as the recent rally bears resemblance to a liquidity sweep rather than a structural shift. Following the sweep of the $0.05 liquidity, the price entered a region of long liquidations clustered around $0.045. If the zone between $0.0432 and $0.045 is cleared, the likelihood of an Enjin rally may increase. Nonetheless, buyers must remain vigilant, as this is not yet a clear buying opportunity. It may be more prudent to wait for a more definitive structural break before entering the market.

In summary, Enjin's mid-April rally has laid the groundwork for a potential future upswing, but the recent price increase may not be the start of a sustained rally. The liquidation heatmap and the failure to achieve a clean structural break suggest that a deeper price retreat may be on the horizon for Enjin in the short term.