EOS crypto analysis
The valuation of cryptocurrency has dropped from $260 billion to $241 billion in 24 hours. This is as a result of major cryptocurrencies including bitcoin, Ethereum, Ripple, Bitcoin Cash, and EOS falling by large margins.
EOS recorded a loss of about 13% on June 24th. For a third day in a row EOS has recorded the biggest loss amongst major cryptocurrencies. EOS is the delegated proof-of-stake (PoS) network based on the Ethereum blockchain protocol. Other cryptocurrencies such as BTC, ETH, XRP, and BCH fell by 3.5%, 4.6%, 5.8%, and 8.5% respectively.
What resulted to the fall of EOS?
In as much as the fall of EOS could be attributed to a range of factors, it could be centralized to the recent controversy around EOS constitution and centralization.
In a report by CCN, there were heavy criticisms of EOS by Cornell professor Emin Gun Sirer and smart contracts pioneer Nick Szabo for its bugs and characteristics that point toward network centralization.
Szabo criticized the ability of EOS to suspend user accounts, confiscate funds, and auction accounts if user accounts remain inactive for long periods of time. In his own words:
“In EOS a few complete strangers can freeze what users thought was their money. Under the EOS protocol you must trust a ‘constitutional’ organization comprised of people you will likely never get to know. The EOS ‘constitution’ is socially unscalable and a security hole.”
The controversy around EOS hit a high intensity when 27 accounts were suspended by EOS without stating any reason for the suspension. In a document entitled “Emergency Measure of Protection Order (ECAF),” with abnormal authoritarian wording, EOS team said, “it is hereby ordered that the EOS Block Producers refuse to process transactions for the following accounts and keys indefinitely,” because the 27 accounts did not process transactions for long periods of time.
The price of EOS increased from $6 to $23.1 in June, recording more than 285 percent increase. This increase was as a result of the launching of EOS mainnet. The unexpectedly large increase in the value of EOS led the fall of EOS to intensify, and ultimately led the cryptocurrency to record a bigger loss than other major cryptocurrencies.
The past month has been quite turbulent for EOS, leading to a drop from $15.5 to $7, dropping by 55 percent within 30 days. Since the price movement of most cryptocurrency and tokens are primarily influenced by bitcoin and Ethereum it is likely that EOS and other tokens will continue to fall in the upcoming days.
The Relative Strength Index (RSI) of EOS remains at 27.8, demonstrating an oversold condition for EOS. But, in a strong downtrend, oversold conditions shown by the RSI is not sufficient to prevent the value of a cryptocurrency from falling.
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