On paper, EOS appears to have solid foundations, but futures markets show that traders are split on the altcoin’s value.
Even though EOS (EOS) has seen a 27 percent weekly increase in the last 53 days, the altcoin is still in a declining trend. As a result, investors are asking if the former top-5 cryptocurrency has what it takes to recover. Recover after Daniel Larimer, CTO of the EOS development business, resigned in late 2020.
The introduction of competing for proof-of-stake innovative contract systems may have weighed on this initiative from 2017. These systems include Solana (SOL), Polkadot (DOT), and Avalanche ( AVAX). According to data provided by BitcoinTreasuries.net, Block. one, the entity responsible for the EOS token launch. It controls over 160,000 Bitcoin (BTC).
EOS may not be the most popular intelligent contract network. However, it hosts several operational finances, games, exchanges, and decentralized social applications. Non-fungible tokens (NFTs) and social networks are great candidates. This is because the transaction costs for the user are negligible or paid by the wallet or application.
Having significant funds is a fantastic tactic for landing some heavy partnerships. Block.one garnered over $300 million in funding from Peter Thiel, Mike Novogratz, and Alan Howard. The EOSIO creator contributed another $100 million to the Bullish exchange, which concluded its seven-week testnet on September 15.
According to the company’s website, there will be the authentication of all Bullish exchange transactions and states. Then, the EOSIO-based blockchains will keep them. This will allow for instant auditing and integrity. Furthermore, the corporation anticipates making $3 billion in assets accessible to the Bullish liquidity pools.
Traders Lost Confidence
Perpetual contract futures data can reveal how confidence traders are in EOS’s potential to retain the $4.50 support level. Because its price tends to mimic the traditional spot markets, this instrument is the ideal market for retail traders. There is no need to roll over contracts as they approach expiration manually.
There is the matching of Longs (buyers) and shorts (sellers) in any futures contract deal, although their leverage fluctuates. As a result, exchanges will charge a funding rate to whichever party requires more power. And then, they will pay this price to the opposing side.
Neutral markets often exhibit a 0% to 0.3% positive financing rate, equating to 0.6 percent every week. This suggests that longs are paying it.
Data show that there have been no bullish bets since September 19, when the cryptocurrency market crashed. This accused the EOS to fall from $5.25 to $4.15 in less than two days. Because EOS is trading 25% below its 30-day high of $6.40, the most recent rally has not been able to boost leveraged long positions.
Top Traders Market
Consider the long-to-short ratio of top traders to get an idea of how whales and arbitrage desks may have positioned themselves during this period.
This indicator is derived using clients’ aggregated positions, including spot, perpetual, and quarterly futures contracts. This statistic aggregates data from numerous markets and provides a more comprehensive picture of professional traders’ influential net position.
There has been a decrease in the long-to short ratio to 1.90 since September 19, which is the lowest level since then. This week’s 27 percent gains came despite the fact that several of the most notable traders had cut their optimistic wagers. The current long-to-short indicator of 3.0 replaced a 30-day average of 3.50.
Many investors, both retail and institutional, doubt that the Bullish exchange debut will be sufficient to reverse the current bearish trend, which started in mid-August. EOS appears to need to demonstrate that their decentralized applications are gaining popularity as competition in the NFT and DeFi sectors grows to rebuild investor trust.
