Bitcoin
BTC$51 321.39

-1.01%

Ethereum
ETH$2 970.08

-0.04%

Tether
USDT$0.999407

-0.07%

Binance Coin
BNB$381.98

0.94%

Solana
SOL$101.64

-3.39%

XRP
XRP$0.540875

-1.48%

Pro traders cut their EOS longs


07 Oct 2021

#EOS

On paper, EOS has great fundamentals, but derivatives markets suggest traders don’t feel the same about the altcoin’s price potential. EOS (EOS) began a descending trend 53 days ago and despite the recent 27% weekly gain, the altcoin is not showing any signs of a reversal. As a result, investors are questioning whether the former top-5 cryptocurrency has what it takes to turn around after Daniel Larimer, CTO of the development company behind EOS, resigned in late 2020.

The emergence of competing proof-of-stake smart contract platforms like Solana (SOL), Polkadot (DOT) and Avalanche (AVAX) possibly weighed on this 2017-era project. One potentially bullish catalyst could be the fact that Block.one, the company responsible for the EOS token launch, owns over 160,000 Bitcoin (BTC), according to data compiled by BitcoinTreasuries.net.

EOS might not be the preferred smart contract network of the day, but a handful of working finance, games, exchanges, and decentralized social applications are running. The transaction cost for the user is either negligible or usually covered by the wallet or application, which makes it a great contender for nonfungible tokens (NFTs) and social networks.

Having deep pockets is an excellent strategy to land some heavy partnerships and Block.one secured over $300 million from investors, including Peter Thiel, Mike Novogratz and Alan Howard. The EOSIO developer reportedly came up with another $100 million cash injection for Bullish exchange, which completed its seven-week testnet on Sept. 15.

According to its website, all Bullish exchange transactions and states will be validated and stored on EOSIO-based blockchains, enabling instant auditing and upholding integrity. Moreover, the company expects to make $3 billion of assets available to the Bullish liquidity pools.

Retail traders lost confidence after September’s crash

To understand how confident traders are about EOS holding the recent $4.50 support, one should analyze the perpetual contracts futures data. This instrument is the retail traders' preferred market because its price tends to track the regular spot markets. Unlike quarterly futures, there is no need to manually roll over the contracts nearing expiry.

In any futures contract trade, longs (buyers) and shorts (sellers) are matched at all times, but their leverage varies. Consequently, exchanges will charge a funding rate to whichever side demands more leverage, 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. Data reveals a complete absence of bullish bets since Sept. 19 when the cryptocurrency market plunged and caused EOS to drop from $5.25 to $4.15 in less than two days. However, the recent rally's inability to boost leveraged longs can be explained by the EOS price being 25% below the $6.40 peak just 30 days ago.

Top traders sold during the recent rally

To understand how whales and arbitrage desks may have positioned themselves during this period, one should analyze the top traders' long-to-short ratio. This indicator is calculated using clients' consolidated positions, including spot, perpetual and quarterly futures contracts. This metric provides a broader view of the professional traders' effective net position by gathering data from multiple markets.

As shown above, the 1.90 long-to-short ratio seen on Oct. 3 still favors longs but is the lowest level since the Sept. 19 price crash. Interestingly, the recent 27% weekly gains happened while the top traders were reducing their bullish positions. Meanwhile, the current 3.0 long-to-short indicator sits slightly below the previous 30-day average of 3.50.

Both retail and pro traders seem unconvinced that the Bullish exchange launch will be enough to break the prevailing bearish trend initiated in mid-August. For EOS to regain investor confidence, it seems essential to show that their decentralized applications are gaining traction as the competition gains ground in NFT and DeFi sector.


Related

How Much Will EOS Be Worth?
How Much Will EOS Be Worth?
Best online trading platform for professionals
Best online trading platform for professionals
Three reasons why EOS price has pumped 100% in three days
Three reasons why EOS price has pumped 100% in three days
Block.one's settlement with SEC
Block.one's settlement with SEC
EOS & Block. One May Have Faked ICO Demand
EOS & Block. One May Have Faked ICO Demand
Prepare for the Altcoin Season
Prepare for the Altcoin Season

Top Cryptocurrencies with Price Predictions

# Crypto Prediction Accuracy CVIX Price 24h 7d Market Cap 7d price change
1 Bitcoin (BTC) BTC Bitcoin predictions 61.2% 78 $51 321.39 -1.01% -1.18% $1 007 692 041 556 BTC 7 days price change
2 Ethereum (ETH) ETH Ethereum predictions 63.2% 76 $2 970.08 -0.04% 5.19% $356 888 554 759 ETH 7 days price change
3 Tether (USDT) USDT Tether predictions 91.6% 1 $0.999407 -0.07% -0.15% $97 783 839 269 USDT 7 days price change
4 Binance Coin (BNB) BNB Binance Coin predictions 69.2% 63 $381.98 0.94% 7.61% $57 122 110 921 BNB 7 days price change
5 Solana (SOL) SOL Solana predictions 75.2% 53 $101.64 -3.39% -10.60% $44 820 445 776 SOL 7 days price change
6 XRP (XRP) XRP XRP predictions 86.8% 21 $0.540875 -1.48% -3.87% $29 509 391 184 XRP 7 days price change
7 USD Coin (USDC) USDC USD Coin predictions 96% 1 $1.000078 0.01% 0.01% $27 984 520 970 USDC 7 days price change
8 Cardano (ADA) ADA Cardano predictions 67.2% 64 $0.586269 -2.03% -3.60% $20 791 742 444 ADA 7 days price change
9 Avalanche (AVAX) AVAX Avalanche predictions 68.8% 61 $36.78 -2.34% -11.59% $13 873 006 300 AVAX 7 days price change
10 Wrapped TRON (WTRX) WTRX Wrapped TRON predictions 71.2% 60 $0.139158 -0.09% 6.33% $12 248 949 216 WTRX 7 days price change
11 TRON (TRX) TRX TRON predictions 71.2% 60 $0.138928 -0.56% 5.92% $12 228 675 321 TRX 7 days price change
12 Dogecoin (DOGE) DOGE Dogecoin predictions 88% 12 $0.084094 -0.63% -1.49% $12 040 838 074 DOGE 7 days price change
13 Chainlink (LINK) LINK Chainlink predictions 67.6% 68 $18.12 -2.55% -9.17% $10 638 341 760 LINK 7 days price change
14 Lido stETH (STETH) STETH Lido stETH predictions 91.6% 1 $2 941.39 -0.40% -3.32% $10 258 752 564 STETH 7 days price change
15 Polkadot (DOT) DOT Polkadot predictions 76% 50 $7.49 0.22% -3.63% $9 603 442 412 DOT 7 days price change

Be the first to receive Cryptocurrency Price Predictions and Forecasts daily

Get cryptocurrency price predictions, forecasts with analysis and news right to your inbox.

© 2015-2024 Crypto-Rating.com

The usage of this website constitutes acceptance of the following legal information. Any contracts of financial instruments offered to conclude bear high risks and may result in the full loss of the deposited funds. Prior to making transactions one should get acquainted with the risks to which they relate. All the information featured on the website, including information about the cryptocurrencies and bitcoin is intended solely for informational purposes, is not a means of advertising them, and doesn't imply direct instructions for investing. Crypto Rating shall not be liable for any loss, including unlimited loss of funds, which may arise directly or indirectly from the usage of this information. The editorial staff of the website does not bear any responsibility whatsoever for the content of the comments or reviews made by the site users about cryptocurrencies. The entire responsibility for the contents rests with the authors. Reprint of the materials is available only with the permission of the editorial staff.