It has been about a month since EOS launched its mainnet and the price has not been performing well. Coming up to the mainnet launch, there was a lot of anticipation for EOS to make a big impact in making blockchain more accessible to businesses. Amid this anticipation, the price traded around the $14 mark but we are now trading at almost half this price. 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.
EOS proposed to solve the scalability trilemma which Vitalik Buterin has spoke about on several occasions. The scalability trilemma states that any decentralised system where every node has to confirm every transaction can have only two of the following three:
- Decentralisation of Block Production
Through experimenting with altering 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.
We still see larger volume on the price drops compared to the gains as the price moves towards lower and lower valuations. The 200EMA on the daily chart has been acting as resistance for the past few weeks and the $7 mark has long been acting as support. It is highly questionable whether $7 can continue to act as support amid the price drops we are currently seeing.
On the 4-hour chart, EOS is currently trading at its 50EMA and 100EMA. The last three candles have been on low volume and price looks set for another drop. The MACD has recently crossed the centreline to the downside which is a bearish signal. In the event of a price drop, it is likely we meet some support around the $7.4-$7.5 range as this has been an area where a lot of trading activity has occurred in the past.
The 1-hour chart tells the same tale as the 4-hour but in slightly more detail. We have been seeing rises in recent candles but these are on minuscule volume and the gains are backing off as we approach moving averages. The MACD looks set to cross the centreline to the upside which is typically a bullish signal but with more bearish signals on the longer term charts, this is likely to have little to no effect.
- The price has performed poorly since the mainnet launch. It is currently trading at almost half the price it was coming up to mainnet launch.
- The price suffered steep declines in the two weeks it took for the mainnet to be launched by the community as investors lost confidence.
- Currently, we are seeing some gains but on low volume. The price appreciation is slowing as it reaches moving averages on the 4-hour and 1-hour charts.
- $7 has been acting as a longer-term support level.
- In the event of a price drop, there is also likely to be some support at the $7.4 to $7.5 level as a lot of trading activity has occurred here in the past.
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