EOS Price Continues to Depreciate Since Mainnet Launch, Investors Disappointed
EOS Depreciates to Half its Price Since its Launch, Investors Disappointed
After a month of EOS mainnet launch, it is evident that it has not lived up to its hype. There was a lot of anticipation for EOS to make a big impact in making blockchain more accessible to businesses. This excitement led EOS to be traded at a price of $14, which is almost double of current valuation. Notably, EOS has been downtrending since the mainnet launch consistently with the price forming lower lows and lower highs and failing to keep up with the performance of Bitcoin this week.
They proposed to solve the scalability trilemma which Vitalik Buterin has spoke about on several occasions. The scalability trilemma states that any decentralized system where every node has to confirm every transaction can have only two of the following three; decentralization of Block Production, Safety or Scalability.
By changing the consensus algorithm, EOS proposed that they could achieve all three of the above, but the price action shows so far that this experiment has been a failure. Once the software was released, it took approximately two weeks for the mainnet to be launched by the community. This period suffered steep price drops as investors lost confidence in the project and rushed to sell.
EOS was consolidating inside a falling wedge pattern previously highlighted, indicating that an uptrend is in the cards. Price hit resistance around 9.3764 and is retreating, possibly making a correction to the broken resistance.
Applying the Fibonacci retracement tool on the latest swing low and high shows that the 61.8% level is closest to the broken wedge top, which might now hold as support. If so, EOS could resume the climb to the swing high or higher.
However, the 100 SMA is below the longer-term 200 SMA to indicate that the path of least resistance is to the downside. In other words, the downtrend still has a chance at resuming. The gap between the moving averages is narrowing to indicate weaker bearish pressure and hint at a potential upward crossover. These dynamic inflection points are also around the 38.2% to 50% Fib levels, which might be enough to keep losses in check.
Cryptocurrencies have been on a good run for the most part of July, with some saying that the industry has already bottomed out. But, others dismiss this as a short squeeze or dead cat bounce. Recent focus has been on institutional funds these days as it was reported that BlackRock, the world’s largest asset manager, has formed a team to look into investment opportunities in the space. Further updates like this could continue to prop EOS and its peers higher in the coming weeks as it fuels investor optimism and projections of higher liquidity.