Price/Trade Analysis: The EOS chart doesn't fill us with much confidence right now, but it might be a good pick-up in a few weeks time

News

EOS (EOS) has been in the news lately a lot as the road of the $4 billion ICO wasn't an easy one. Before the main net launch in early June there were several vulnerabilities disclosed by known parties, one of which was the the internet security giant 360.

Now after a successful launch EOS is again the news with a new bag of problems. After realizing that the EOS constitution can't be properly enforced and that it leaves many holes to fill, founder Dan Larimer had to rethink the strategy and come out with new plans.

Another controversial update came in just recently where Block.One, the company that is lead by Dan Larimer and which is behind EOS, will now vote for Block Producers with the 10% that has been allocated to themselves via the genesis block. This happened even though they previously stated that they will leave the voting to the community.

Charts

The EOS/BTC chart doesn't look very pretty at the moment. Even though the project has already lost 50% its value towards Bitcoin, we still expect another few legs down at least.

Currently EOS is in a descending channel (pink) and has formed a bear pennant (blue) at the current spot. This makes us expect another drop and could also indicate that we are going back to the original trend line (red) that has been serving as a bottom for the previous market cycle as well. If this is the case we could see EOS hitting as low as 0.001 BTC / EOS.

In case of bullish fundamentals a higher bottom could form together with a new trend line in some cases, but either way we expect a good shorting opportunity resulting from the pennant.

The EOS/USD chart looks very similar in this case.

Here we have the original trend line (red) that has not been hit yet. In case the USD chart has another leg down, EOS will hit $6.9, which is not impossible considering how the BTC chart looks at the moment.

A better case for EOS holders would be if BTC starts gaining in value and EOS simply holds the USD value and goes out sideways from the falling wedge (pink), on the EOS/USD chart while losing value on the EOS/BTC chart until it bottoms out.

Either way we feel that EOS is not a good hold right now, but could be again in a few weeks time.

Check out my recent Price Analysis charts on Bitcoin and Ripple.