As the blockchain sector continues to evolve, occasional protocol updates are needed to ensure projects stay up to date with the latest developments and provide users wit the best user experience possible.
Since May 5, EOS price has rallied more than 100% following a recent protocol upgrade that increases the project’s inflation rate.
Data from Cointelegraph Markets Pro and TradingView shows that after hitting a low of $6.18 on May 5, the price of EOS has catapulted more than 100% to a mid-day high of $12.85 on May 6 thanks to a record $15 billion in 24-hour trading volume.
Protocol upgrade boosts rewards for EOS stakers
According to the EOS Twitter feed, the most significant developments for the network over the past month have been related to resource allocation and staking rewards.
A recent report commissioned by Block.one concluded that the protocol needs to increase the rate of inflation from its current pace of 1% to a rate between 1.2% and 3.8% in order to increase financial incentives for voters and block producers.
An EOS Staking Rewards Model Commissioned by @block_one_ + @moore_chaney interviews @rschlesinger for the @cryptowriter_ podcast 😎 https://t.co/psIFnzL9Xj@BrendanBlumer @bytemaster7 @EOS_Nation @EverythingEOSio #EOS #EOSIO
— EOSwriter (@eoswriter) May 2, 2021
While the community still needs to settle on the exact size of the inflation rate will increase, the prospect of higher yields for community participation helped spark more excitement in the project.
A second major development for the protocol is the EOS PowerUp model, which allows users to pay a fee to power up their account for 24-hours to transact on the network as opposed to paying a transaction fee for every transaction.
The PowerUP model offers EOS token holders another way to earn a yield by depositing unused EOS tokens to receive a percentage of all the ‘power-up’ fees that are generated by the network.
This has become an increasingly attractive option as most traders are searching for ways to avoid the high transaction fees and network congestion on the Ethereum (ETH) network.
VORTECS™ data from Cointelegraph Markets Pro began to detect a bullish outlook for EOS on May 4, prior to the recent price rise.
The VORTECS™ Score, exclusive to Cointelegraph, is an algorithmic comparison of historic and current market conditions derived from a combination of data points including market sentiment, trading volume, recent price movements and Twitter activity.
As seen on the chart above, the VORTECS™ Score for EOS was in the yellow range for the first few days in May before reaching into the green zone to register a high score of 68 on May 4. This was just one hour before EOS price began to rally 100% over the next two days.
With the overall cryptocurrency market heating up and 2016-era projects like Litecoin (LTC) and Ethereum Classic (ETC) reaching new highs, EOS is one large-cap blockchain project that could continue to benefit as the cryptocurrency bull market stampedes ahead.
EOS Price Analysis: EOS briefly spikes to $5.10 but finds rejection
- EOS price analysis is bullish on today’s chart.
- EOS/USD got rejected at $5.10
- EOS is rejecting further downside at $4.574
EOS is trading bullishly on our 24-hour EOS price analysis following a sharp increase to the $5.10 mark, where the bulls were rejected and pulled back to $4.856. Therefore, we are anticipating that buyers will regain momentum and rally against rejection in the course of the day.
The overall cryptocurrency market is trading in the bullish region with market leaders BTC and ETH both gaining around 1 percent. Cardano is the best performer of the day with a 24-hour positive change of 12 percent. We are expecting the general cryptocurrency market to post further gains in the course of the upcoming week.
EOS price movement in the last 24 hours: EOS dashes to higher daily high
EOS/USD traded in a range of $4.574 – $5.080, indicating low volatility over the last 24 hours. Trading volume has decreased by 18 percent and totals $1.23 billion. Meanwhile, the total market capitalization trades around $4.651 billion, ranking the coin 34th place overall.
EOS/USD 4-hour chart: EOS to rally overnight?
On the 4-hour EOS price analysis chart, we can see the EOS price rejecting further downside as bulls prepare for another rally higher.
EOS/USD 4-hour chart. Source: TradingView
EOS price action traded with strong volatility over the past week. After a rally to the $31 mark, EOS/USD could not reach further upside and retraced to $28.5.
From there, a lower high was set around $4.70, with a strong decline over the following days. EOS/USD lost more than 30 percent from there until support was found at $4.00. Rejection for further downside was seen over the following days, with EOS moving to the $4.50 mark.
EOS Price Analysis: Conclusion
EOS price analysis is bullish for the next 24 hours as the market retested the previous low and currently prepares to rally higher again. As long as the previous low holds, we expect EOS/USD to move above the $5.08 current high and see further upside over the weekend.
EOS price analysis: EOS/USD to spike to $5 in the next 24 hours
- 5-day price analysis chart began off with the bears controlling the market.
- The RSI is at 60, and it points towards the overbought region.
- The MACD line repeatedly crossed over the red line on the four-hour price analysis chart.
EOS price analysis: General price overview
5-day EOS price analysis chart began off with the bears controlling the market. Strong pressure from the buyers caused the price to trade in an upward momentum facing slight bear resistance and picking off the bullish trend.
The Bollinger bands are wide most parts of the five-day price analysis chart, suggesting the coin is bullish in most trading sessions.
The EOS/USD pair maintained its upswing yesterday. However, the coin was in a powerful bear trend during yesterday’s EOS price analysis. This bearish movement reversed when the EOS/USD daily price analysis chart began, pushing prices upward and forming head and shoulder trends to the intraday highs at $4.7. It encountered
Sellers control the cryptocurrency space; as a result, most of the digital assets are trading in a bearish trend.
The largest digital currency, BTC, is trading a few dollars above $45K at a drop of more than one percent. Before the recent price dip occurred, Bitcoin was trading in a bullish trend, and it had surpassed its target of $50K. Bitcoin’s closest competitor ETH trades at $3.2K recording a more than three percent price drop from yesterday’s price. EOS/USD is also trading in the same trend recording a drop of more than one percent setting its price to $4.7.
EOS/USD price movement in the last 24 hours: bullish signal
EOS began the daily rice analysis chart in bullish momentum. The bulls caused the prices to move in an upward forming cup and handle trends. The Balance of Power indicator remained positive in most parts of the daily price analysis chart, suggesting the bulls’ pressure is so intense, and sellers seem too weak to battle the bullish trend.
Four-hour price analysis chart: Bull dominance
The RSI is at 60, and it points towards the overbought region. If the buyers manage to pass the 70 mark, the bears will have hard work of curbing the bullish trend that will set in.
On the four-hour price analysis chart, the MACD line has repeatedly crossed through the red line. This shows that buyers have been attempting to push back the bears for a long time before finally overcoming solid support that is aiding the rise.
EOS price analysis: Conclusion
The buyers have invaded the EOS/USD market, causing the price to surge in a slight bullish momentum.
The EOS price is an upswing, with the price action structure turning bullish again after a higher low was established near $4.5 in early trading hours. As a result, we anticipate that EOS/USD will rise over the weekend and attempt to break past the $5 current swing high.
Derivatives data shows pro traders turning bullish on EOS price
Retail traders turned their backs on EOS, but derivatives data shows pro traders maintaining a bullish perspective for the short-term.
EOS rallied in May after Block.one, a blockchain software firm, announced a $10 billion funding round to build an EOS-based crypto exchange platform called Bullish. The EOSIO development company revealed that it had raised capital from Peter Thiel and Mike Novogratz, as well as hedge fund managers Alan Howard and Louis Bacon.
In light of the ‘bullish’ news, the recent $6 local top stands 60% below the $15 high reached on May 12, and this leaves investors with little reason to celebrate. At the moment, retail traders are not comfortable using leverage for bullish positions and professional traders have been neutral-to-optimistic since mid-July.
EOS price in USD at Kraken. Source: TradingView
Analysts also pointed to a May 2 report commissioned by Block.one that suggested an increase in the inflation rate from 1% to somewhere between 1.2% and 3.8%. The new issuance rate would be necessary to increase financial incentives for voters and block producers.
However, the lack of deliveries and partnerships caused EOS to quickly lose steam, and the price fell to a low at $3.04 on June 22. The bearish trend ended on June 23, as the little-known ‘Bullish’ exchange said it would be going public on the New York Stock Exchange via a special-purpose acquisition company, or SPAC.
A positive and lasting trend initiated as the ‘Bullish’ exchange released its private alpha version on July 27 and promised a full launch later in 2021. The project also mentioned that it would have spot trading, margin trading, and liquidity pools.
Finally, on Aug. 19, EOS announced free access to live pricing data using real-time market information provided by AlgoTrader. The Swiss-based startup oracle includes multiple assets from various exchanges and can create synthetic instruments, derivatives, and stablecoins.
Retail traders were momentarily bullish
To understand whether traders are leaning bullish as EOS price holds the $5 support, one should analyze the perpetual contracts futures data. This is the retail traders’ preferred leverage instrument because its price usually perfectly tracks the regular spot markets. There is also no need to manually roll over contracts nearing expiry, as required on quarterly futures.
In any futures contract, trade longs (buyers) and shorts (sellers) are matched at all times, but their leverage varies. Consequently, exchanges will charge whichever side is using more leverage at a funding rate to balance their risk, and this fee is paid to the opposing side.
Neutral markets tend to display a 0% to 0.03% positive funding rate, equivalent to 0.6% per week, indicating that longs are the ones paying it.
EOS perpetual futures 8-hour funding rate. Source: Bybt.com
Data reveals a modest excitement building up from Aug. 8, which lasted less than 10 days. The positive funding rate shows that longs (buyers) were the ones paying the fees, but the movement seems reactive to the price increase and faded as EOS failed to breach the $6 resistance.
Data shows pro traders have a bullish bias
It is also useful to analyze the premium quarterly futures contracts, as whales and arbitrage desks trade such instruments more frequently. In the fixed-month contracts, eventual demand imbalances are reflected by a price difference versus regular spot markets.
Healthy markets should display a 0.5% to 1% premium, which is equivalent to 3% to 6% annualized. If the futures contract’s premium is nonexistent, it is a bearish indicator because investors are not comfortable creating long positions using leverage.
EOS Sept. futures contracts premium at FTX. Source: TradingView
There has been no change in the 6% annualized premium this time despite EOS’s price movement. However, data shows that professional traders have been slightly bullish since mid-July, while retail traders were primarily flat apart from a brief 10-day period.
Although it remains unclear how the ‘Bullish’ exchange launch might impact the price of EOS, derivatives indicate that whales and arbitrage desks positively reacted to the news and have kept the bullish stance ever since.
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