EOS, often billed the competitor to Ethereum is both lauded and hated. In one regard its transaction speed allows it abilities Ethereum may never have, like run transactions on a gaming platform. The usability of decentralized applications or DAPPS is bar none. But some criticize it as too centralized because it is controlled by 12 ‘block producers’ who verify its transactions and are elected by the rest of token EOS holders.
Regardless of what you think about EOS, a recent event called ‘B1 June’ at the beginning of the month was important. This event, which came with much publicity, was an opportunity for Blockone, the company that created the EOS software, to give an update on EOS to the community.
Rumors about what would be revealed were a dime a dozen. An Apple partnership to government partnerships were just a couple of the rumors.
And price rallied with every rumor, nearly doubling during the price of May. But there was a problem. As I described to my subscribers, that all though I am very bullish on EOS long term, we were completing a diagonal off of the December low somewhere in the vicinity of $9. All five waves of said diagonal were near completion. And, as we got closer, it appeared that the top might correspond close to the date of the news.
The actual news was encouraging, but perhaps less sensational than expected. A new security partnership with security hardware company Yubico, and an update that would make EOS easier for developers, and inclusion of EOS in Coinbase’s institutional business, were on the announcement list. The centerpiece was Voice.com, a Twitter like social media sites where active users can share in the ad revenue. This was Blockone’s first DAPP development on the EOS change.
Price topped the day before the announcement but we didn’t see a confirmation until after the news. As of writing price is 23% lower than the $8.69 peak at $6.71 but has seen as low as $5.90.
There is no sign of a bottom yet, as I count this wave 2 in a large third wave that may take a couple years to play out. A solid wave 2 would drop to $2.96 the 61.8% retrace of the entire move. . However, opposite to equities, leading diagonals, the pattern we’ve seen off the December low often produce more shallow corrections in crypto. Ideally we see at least $4.47 in this correction.
We often see stocks sell off after great earnings. Though, rarely do we see such a selloff without some sort of setup telegraphing the news. That is no different in any asset class, not even crypto.
It is often the rumor mill that stirs sentiment towards a price top. Those that want to profit from the news often buy early. There may be some insiders playing as well, and in the less regulated crypto market that is a given. At some point the promise of good news brings everyone that is in position to buy into a position. As profit taking starts, often there are few to pick up the bid, as everyone has already been brought in. Not until price washes out, and scares the last of the weak hands will we see a rally again. In the future if you are considering buying due to news the Elliott Wave Theory can be used to determine whether or where to enter, or whether you need to be cautious into such an event.
Now to remind, as stated above, EOS is a coin I see very bullish. Ultimately this wave 2 should setup a major third wave rally, ideally topping in the 4 figures in a few years.
