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EOS price analysis: EOS/USD battles to defend $5.0 support as cryptocurrencies react to falling stock prices

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  • EOS id down 9.93% in the last 24 hours after breaking the bullish trendline support at $5.82.
  • Globally, stocks have taken a plunge between 3% – 5%.

EOS declines are unstoppable following the formation of a subtle double top pattern. The reaction to the pattern was catalyzed the high volatility in the market that has led to the plunging of prices across the board. The worst hit by the declines are the major cryptocurrencies in the top 20 bracket. EOS id down 9.93% in the last 24 hours after breaking the bullish trendline support at $5.82. This opened the door for more losses as EOS fell like a stone in the air past several other support zones at $5.6 and $5.4.

At the moment, $5.3 has given in to the selling pressure that seems not to slow down. The next support is at $5.2 while the lifeline support at $5.0 is well within reach. All indicators are pointing towards continued declines at least in the short-term. But if the buyers can avoid declines below $5.2 then EOS can find balance and prepare for a pullback.

The markets are jittery both in the crypto space and the stocks. Globally, stocks have taken a plunge between 3% – 5%. At the same time the majority of stock indexes are recording losses ranging from 10% to 20%. Gold is reported to be performing relatively higher and is believed to be used to hedge against the falling stocks. However, cryptos seem to be losing their competitive edge with more mature assets like gold. The reaction of crypto prices to stock prices is hard to explain because both of these assets have different drivers for their price actions. However, the current reaction could be associated with the Fed’s actions in terms of interest rates.

At the same time, it is not clear if the funds that are coming out of the stocks will end up in gold and other bond related products or digital assets will get a boost as well.

EOS/USD 4-hour chart

Source: fxstreet

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EOS Daily Price Forecast – December 14

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EOS/USD Medium-term Trend: Bearish

Resistance levels: $ 6, $7, $8.
Support levels: $3, $2, $1.

Yesterday, December 13, the price of EOS was in a bearish trend. The cryptocurrency reached the high of $2.09 while in a bullish trend zone but faced resistance at the $2.0 price level. The crypto fell from its recent high and it is hovering above the 12-day EMA and the 26-day EMA.

Yesterday, the bears broke the 12-day EMA, the 26-day EMA and fell to the low of $ 1.87. However, the price of EOS is likely to fall again as it is under the bearish trend zone. Meanwhile, the price is EOS is below the 12-day EMA and the 26-day EMA indicating that price is in the bearish trend zone. Also, the MACD line and the signal line are above the zero line which indicates a sell signal.

EOS/USD Short-term Trend: Bearish

On the 1-hour chart, the price of EOS is in a bearish trend. The price of EOS was ranging at a price of $1.9 before the bearish breakout. The 12-day EMA and the 26-day EMA were horizontally flat. On December 13, the bears broke the 12-day EMA, the 26-day EMA and fell to the low of $1.87. Currently, the crypto is ranging above the $1.87 price level.

However, the crypto’s price will fall again if the price is in the bearish trend zone. Meanwhile, the crypto’s price is below the 12-day EMA and the 26-day EMA indicating that price is the bearish trend zone. Also, the MACD line and the signal line are below the zero line which indicates a sell signal.

Source: Bitcoin Exchange Guide

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EOS: Is This Futuristic Blockchain All It’s Cracked Up To Be? [Video]

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Today we’re going to take a look at one of the biggest names in cryptocurrency: EOS.

It’s one of the most famous smart contract platforms, after a year-long token sale that raised $4bn dollars. Unlike Bitcoin, EOS transactions are fast and free

Source: fxstreet

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Speaking of death spiral: EOS block producers close to wind up in one

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Death spiral theory subscribers argued, once Bitcoin’s price falls below its cost of mining, the incentive to mine will deteriorate, thrusting bitcoin into a death spiral. That is, without the mining activities supporting the ledger that maintains the records of who owns what.

Corey Miller, part of the BlockTower investment team, raised an interesting question apro po the topic of death spirals. While everyone was focused on the baseless bitcoin mining death spiral, EOS price crumbling got its block producers in hot water.

er:In this survey filled out by block producers, the break-even cost for them was ~$4 per EOS. EOS is currently trading at $1.80.

 

The survey he is quoting is this one, done by altShiftDev, company that developed one of the EOS wallets. The article accompanying the survey states that “The EOS Mainnet grows at a rate of 5% per year, 4% of that is locked away in the Worker Proposal Fund — an untouched account (eosio.saving) currently holding 18.5m EOS established to fund upgrades to the network.

Teams were asked at which price-point they fall into the following categories (in order): Break-Even, Cuts to Development and Community Projects, Major Layoffs and Bankruptcy. They were asked to assume a stable price of EOS for at least 3 months.

  • The average breakeven price-point across my dataset was $4.14.
  • When asked at what price they would likely have to make major cuts to community projects and open source development, the average across all tiers was $3.67.

  • The average price across all Tiers at which major layoffs would have to be made is $3.08.

  • The average team size across all tiers was 6.85 members with T1 teams leading the group with an average team size of 8.63 members.
  • The average T1 team (of EOS BPs) spends $925,625.00/year

Miller continues:

Given there is no difficulty adjustment mechanism in EOS, BPs are going to be forced to either downsize their operations/cut costs or, in some cases, completely shut down.It seems that we are actually starting to see the latter play out here. Of the top 81 BPs (who are the only ones who receive rewards) ~10% are currently turned off. More specifically, there are quite literally getting free rewards for doing nothing.

Unless EOS price rebounds substantially, I think we are going to see more BPs shut down. The other option is to increase BP rewards (could adjust dynamically based off of EOS price).

EOS block producers explained

EOS focues blog, EOS tribe explains block producers role as follows:

“The annual inflation [in EOS network] is 5%, but as times goes on and the EOS tokens are worth more, the token holders can vote on decreasing or increasing the inflation rate.

The inflation rate is split up into different pools because maintaining the blockchain includes Block Producers (BPs), who run the network, and worker proposals for improving the blockchain. The inflation is split up between those two groups with BPs earning 1% and worker proposals with 4%. Worker proposals are presented to the community and token holders vote on what improvements to make.

The BP funds are split up differently to maintain higher value for those most trusted in the community and whom runs one of the active twenty one BPs.

As written in the code, 25% of the BP pay goes to active producers and 75% goes to standby BPs calculated from a percentage of the votes received. 318 EOS tokens are awarded to the 21 active BPs per day. 200 EOS per percentage of the vote per day are awarded to all standby BPs.”

Bitcoin mining death spiral rebuffed

Arjin Balaji of TheBlock exceptional explanation of this:

Prior to proclaiming Bitcoin’s demise due to the death spiral, it’s important to understand a few common misconceptions about miners and their relationship with the difficulty adjustment:

  • The “break-even cost of mining” is much lower for many miners than is often quoted by analysts (who focus on the average miner). Many of the most profitable miners have a “cost per Bitcoin” (opex + capex) that asymptotically approaches 0. This is the combined result of heavily-subsidized electricity (often free or even negative-cost) and extremely low cost of ASICs for the largest miners, who are often vertically integrated or receive favorable deals from hardware manufacturers.
  • Similar to producers in other markets (e.g., traditional commodities), miners have a set of constraints that may rationally force them to mine at a loss — this is a situation accounted for by miners. These constraints include long-term power purchase agreements, hardware purchase agreements, facility leases, and other financial arrangements. With these constraints and strategically-planned cash reserves, miners can mine at a loss for an extended period.
  • Contrary to mining other commodities, where mining at a loss results in sustained price suppression (due to increased supply in the market), rational miners want to mine Bitcoin to accelerate the time to the next difficulty adjustment (which more accurately reflects the “real” difficulty of mining). The miners that endure a crypto “bear market” are at a massive competitive advantage, as we saw with miner consolidation in the last market cycle.

Additionally, what death spiral crew obviously was not familiar with is one ingenious feature Satoshi Nakamoto built into the bitcoin mining design. And that feature is difficulty adjustment. Thanks to this stroke of genius baked into its fundamental design, every time a mining rig is shut down, the bitcoin protocol increases the incentive for other miners to stay online.

Source: captainaltcoin

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