Blockchain project EOS started this week on a negative note after an independent agency downgraded its rating from B to C-.
Weiss Crypto Ratings published a report on December 6 wherein it demoted EOS to lower ranks over its centralization. The agency noted that just 0.01 percent of the EOS token holders control over 68 percent of the voting power on its blockchain.
That allows a handful of entities to practice censorship over hundreds of thousands of EOS investors. In comparison, provable decentralized projects like Bitcoin works across 9,300 nodes to confirm and validate transactions atop its blockchain.
1/6 We’ve had great respect for work and thinking that went into the #EOS project. But the Weiss Crypto Ratings model is not based on opinion. It’s driven by data. And that data has now caused a downgrade from B to C-. Here's why (full article to be published soon):
— Weiss Crypto Ratings (@WeissCrypto) December 6, 2019
EOS spent a quiet weekend but its value eventually took a toll during the Monday session. The EOS-to-dollar exchange rate was down by $0.083, or 3.02 percent, as of 1658 UTC.
Against bitcoin, the cryptocurrency did relatively better, falling about 1.64 percent to trade at 359 sats. The market capitalization likewise took a plunge roughly worth $500 million to settle a low at $2.534 billion. At its December peak, it was $2.613 billion.
The latest move downside brought EOS close to retesting the support of an Ascending Channel. While the lower trendline certainly capped the price from falling further downward, the negative sentiment arising from the Weiss report could weaken it in the near-term.
The bearish case prompts EOS to retest to close below the Channel Support and target 304-342 sats area as an accumulation range. In the event of a breakdown, traders could extend their short position towards 284 sats while keeping a stop loss above the level at which they had entered the trade.
EOS is trending inside an ascending channel | Source: TradingView.com, Coinbase
On the other hand, the price has not failed to reach the upper levels so far. A pullback action from Channel support could push EOS back towards the Channel resistance.
Traders with low-risk appetite could use the bounce-back as an opportunity to open a fresh long position 405 sats. Meanwhile, they could minimize risks by maintaining a stop-loss order just below the Channel support.
From a fundamental point of view, investors who were bullish on EOS might find it hard to digest its centralization issues. The sentiment could prompt some to switch their positions for tokens with more attractive opportunities.
Such a scenario could suit the breakdown scenario as discussed above. Meanwhile, traders can look to accumulate EOS ahead of the launch of Voice.
EOS creator Block.One on Thursday announced that it would launch the EOS-based social media platform on February 14. While the announcement did not help neutralize trading sentiments immediately, traders can still speculate on the Voice launch to make interim profits.
One could watch out for a reversal from Channel resistance – a sign that traders are processing the Voice news – and place his/her upside positions.
EOS Price Hit after Getting a C- in Decentralization by Weiss was last modified: December 9th, 2019 by Yashu GolaThe post EOS Price Hit after Getting a C- in Decentralization by Weiss appeared first on NewsBTC.