[updated March 15, 2019] — 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 early December 2017 levels.
From the looks of recent news and weekly technical analysis, the outlook on EOS price is not very positive.
Lagging Blockchain Development
Recent data from Longhash revealed that development on the EOS platform had drastically slowed down as the crypto winter took a toll on the market. This adds to the many problems the platform has faced recently including persistent hacks, voting scandals and criticism from top individuals within the crypto market.
According to the data, out of more than 4,000 commits over the past 12 months, only 114 took place over the past three months on the EOS platform. One issue is that there is a growing concern that EOS blocks are oversized. The chain seems to be so large, and many node operators no longer seem willing to run “full history nodes” which is crucial when it comes to some aspects of the EOS development.
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.
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.
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.
Technical Outlook on EOS Price
Here is a SHORT EOS TradingView chart by Goldgram.
EOS/USD Weekly Chart: March 14, 2019
The chart indicates the outlook for EOS is not that positive. EOS has lately been struggling as critics have questioned the decentralisation of its governance towards the end of last year. Also last month the platform faced a consensus failure which permitted a hack that resulted in the movement of 2.9 million tokens.
The analyst expects a pull back on the price of EOS in a short while.
3.6200 3.6300 3.6400
3.6600 3.6700 3.6800
Macd is -0.0023
StochRSI is 24.25
However, the long-term outlook for EOS doesn’t look bad as this LONG EOS chart by ForecastCity shows that there is a possibility of an uptrend beginning in EOSUSD.
EOS/USD Weekly Chart: March 4, 2019
. EOS/US Dollar is in a range-bound, and the beginning of uptrend is expected.
. The price is below the 21-Day WEMA which acts as dynamic resistance.
. The RSI is at 51.
. While the price downtrend in the daily chart is not broken, the bearish wave in price would continue.
The analyst suggests that there is a possibility of a temporary retracement to the proposed support zone (3.1360 to 2.1785) if this is so traders can set orders based on the price action and expect to reach short-term targets.
Beginning of entry zone (3.1360)
Ending of entry zone (2.1785)
The long-term, mid-term and short-term outlook of the EOS/BTC pair is:
- Long-Term – neutral to bullish
- Mid-term – bearish to neutral
Please note: this analysis was done on the weekly chart, and therefore the price moves may take several weeks to play out.
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)).