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EOS Price Analysis Nov 30 — Analysis Shows Flattened Price Movement

· 01 Dec 2018 in Analysis

[updated Nov 30, 2018] — EOS is a cryptocurrency asset which powers the EOS.IO blockchain. After experiencing a tremendous boost in share price from March to May 2018, EOS price has suffered losses since, sending the crypto price down to its March 2018 levels.

From the looks of recent news and weekly technical analysis, the outlook on EOS price is not positive

News Updates

Persistent Hacks

One of the dApps running on the EOS platform, EOS Bet has been hacked twice in quick succession. Even though this is just one app among the many that utilize the EOS blockchain, it’s something that brings a bad reputation to the project security wise.

Within one Month, the EOS Bet platform has been hacked twice. The first hack resulted in the loss of over 40,000 EOS tokens which were worth around $200,000 at the time.

A spokesperson for the platform came out to claim that it was a minor incident but was forced to change the statement later.

The second attack occurred on October 17th.  This time hackers managed to steal 65,000 EOS tokens which are roughly worth around $338,000. The platform had to be taken off the internet for a few hours as they figured out exactly what had happened.

Investigations revealed that hackers had found a vulnerability in the transfer part of the code. They proceeded to exploit it and transfer the coins into their accounts.

Explaining what had happened, an executive of the platform said:

“Vulnerability has been discovered in multiple contracts using notification from other contracts. All parameters from notification need to be explicitly checked as checking only contract name, and action name is not sufficient.”

The problem for EOS as a platform lies in that these type of hacks are likely to lead to public distrust of the project.

Voting Scandal

EOS employs a consensus model of governance that is known as Delegated Proof-of-Stake (DPOS). Here investors are rewarded with voting power, and in turn, they get to decide who gets to mine the EOS blockchain.

The EOS network is governed by 21 Block Producers (BPs) whose job is to produce blocks on the EOS blockchain. As a reward, the BPs earn EOS tokens that are created by inflation.

Last month, a spreadsheet was leaked on WeChat that showed Huobi, one of the 21 block producers was involved in mutual voting along with pay-offs. Mutual voting is a process where block producers vote for each other so that they can remain in power and keep their passive income.

It’s an act that contradicts the EOS constitution which states there should be no vote buying.

“No Member shall offer nor accept anything of value in exchange for a vote of any type, nor shall any Member unduly influence the vote of another.”

This scandal shows the flaws of the governance system that EOS employs. Also, this can compromise the integrity of the network as a whole.

For now, we have to wait and see how the people who are in charge of EOS will handle this matter.

However, what we are sure of is that if this issue persists, it’s likely to impact the price of EOS negatively.

Vitalik’s Comments

After the alleged voting scandal, Vitalik Buterin the Ethereum founder was one of the first people to comment on the issue.

He criticized the governance system that EOS uses adding that vote trading is something that is predictable and he had predicted it. What surprised him was that he didn’t expect it to happen so soon.

“As a followup, *this* is why I do not believe in coin holder-voted on-chain treasuries. Any chain where coin holder-voted on-chain issuance is used to fund public goods can easily collapse into this kind of ‘I vote for your crappy project, you vote for mine’ equilibrium.”

Given that Buterin is someone who is well respected within the crypto industry, his comments on the EOS project can instill doubt in the minds of users. It’s highly likely that traders will feel less confident in investing in EOS.

Some Positive News For EOS Price?

The news is not all negative though. Here’s one piece for the optimistic holder.

EOS is looking to deepen its presence in the market and in this regard, Bitfinex has announced plans to launch a decentralized exchange that will feature several EOS pairs. This exchange, which is built on the EOSIO blockchain, is expected to commence operations in December. Furthermore, an Ethereum Dapp known as Bancor is expanding into EOS blockchain so as to provide clients with free and fast transactions. The new product to be known as BancorX, will permit trading between crypto tokens that are based on the EOS blockchain. BancorX will also allow trading between ERC20 tokens and EOS-based tokens.

Technical Outlook on EOS Price

In our last analysis of the EOS asset, it was identified that the crypto asset was in the middle of a symmetrical triangle pattern, with price action found in between the converging trendlines. Right now, EOS/BTC now finds itself at the very apex of the triangle, with the current weekly candle forming a doji. Therefore there is still the possibility of a breakout to the upside, or a potential breakdown with price collapse. Now that we are at a critical juncture as far as the price setup is concerned, a discussion of how these scenarios could play out is done in this analysis piece.

Fundamental Outlook

EOS seems to have moved on nicely after news of a hack of a decentralized application on the EOS network was reported last month. There has been no news worthy of reportage of late, and attention seems focused on happenings elsewhere in the market.

Technical Outlook

In a period of what can be described as a cryptocurrency bloodbath, EOS is one of those cryptocurrency assets that has been largely unaffected by all the upheaval. As a crypto that prides itself as the next big thing as far as dApps support is concerned, this is quite significant; moreso when we see that Ethereum (the competing and pioneer dApps network) has been very badly hit by the bearish market sentiment, losing nearly 30% of its October 2018 value.

It is therefore a trader’s dream to be able to trade off technical setups on an asset that has proven itself to be a bit immune to happenings with Bitcoin, Bitcoin Cash or even Ethereum. The identification of the symmetrical pattern and the location of the weekly price candle will therefore give EOS traders something to look forward to going into December.

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EOS/USD Weekly Chart: November 20, 2018

The doji candle shows that there is some indecision in the market as far as EOS is concerned. The symmetrical triangle has traditionally been viewed as a continuation pattern, but this may be negated this time around as the market challenge that EOS has mounted on Ethereum may strike a chord with traders. However, the pattern shows that price has a potential for an upside breakout, or a breakdown of price below the lower border of the triangle. Pay attention to the volume information: there is a green volume candle which indicates that buyers are entering the asset, but only in the long term. This is information that should not be taken lightly.

A deeper look at the EOS/BTC pair on the daily chart reveals that traders are actually selling in the medium-term, as evidenced by the high selling volume. Attention must also be paid to the 50-day exponential moving average, which is presently resisting upward price action within the triangle’s borders. December 2018 will indeed be a pivotal month for EOS/BTC.

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EOS/USD Daily Chart: November 30, 2018

So what are the possible trade scenarios for traders wishing to trade the EOS/BTC crypto pair?

Trade Scenario 1

In the medium term, price action may continue to trade within the borders of the symmetrical triangle, and if this lasts for the next two weeks, it will not be entirely surprising. However, critical to price action is volume information and the position of the exponential moving average with respect to the price candles. If the 50-EMA continues to resist price action and selling volume continues to remain high, this situation may favour a downside break of the triangle, with a push towards the next horizontal support level at 0.00075.

Trade Scenario 2

It is also possible that an upside breakout will result, following complete evolution of the triangle formation. For this to happen, we need to see an increase in buying volume, as well as the 50-EMA providing support to the price candles. This may take a little while to play out.

The picture on EOS/BTC may become clearer next week, which is also when the dust is expected to settle in the crypto market. Until then, EOS/BTC is expected to continue trading within the channel, at least within the current week.

Market Sentiment:

The long term, mid-term and short term outlook of the EOS/BTC pair is:

  • Long-Term – neutral to bullish
  • Mid-term – neutral

Please note: this analysis was done on the weekly chart, and therefore the price moves may take several weeks to play out.

Learn More

Want to learn more about EOS? Read our Beginner’s Guide to EOS here, complete with a history of the project and fundamentals of how the coin provides value.

Interested in investing in EOS? You’ll want to start with our EOS price prediction article—including short-term and long-term outlooks. (Always do your own research and read the site disclaimer)).

The best place to buy EOS is using Binance. This buying guide lays out each and every step you’ll need to properly do so.

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