The past 24 hours were considerably negative for the crypto space as the market stepped back to $241 billion from $260 billion. All the major currencies like Bitcoin, Bitcoin Cash, Ripple, Ethereum and EOS contributed to the $19 billion downshift.
The Ethereum blockchain’s protocol-based proof-of-stake network, EOS, was the biggest sufferer among the prominent virtual currencies. On June 24, the coin was damped a loss of 13 percent while other currencies fell by: BTC-3.5 percent, ETH-4.6 percent, XRP- 5.8 percent and BCH- 8.5 percent.
Reason for EOS’s performance
Although there are many reasons for the down fall of the coin yet there are two main factors that can be pointed out. One of them is abnormal deviation in prices before and after the launch of mainnet and the criticism of company’s constitution and policies.
Smart contract visionary Nick Szabo and Cornell professor Emin Gun Sirer commented on the bugs found in the system and features that are related to network centralization. Szabo was specifically against the power the firm holds over user accounts, funds and account auctions if there is no activity for longer periods of time.
He said, “In EOS a few complete strangers can freeze what users thought was their money. Under the EOS protocol you must trust a ‘constitutional’ organization comprised of people you will likely never get to know. The EOS ‘constitution’ is socially unscalable and a security hole.”
The company faced immense heat after suspending 27 of its user’s accounts. The team said, “it is hereby ordered that the EOS Block Producers refuse to process transactions for the following accounts and keys indefinitely,” through a document named Emergency Measure of Protection Order (ECAF).
The company enjoyed a high rise in its coins value by 285 percent when it’s jumped to $23.1 from $6. The unexpected increase in EOS’s token eventually led to a greater loss in its value which made it the hardest hit digital currency.
In May, the coin recorded a decrease by 55 percent within 30 days from $15.5 to $7. As price of the most of the cyber coins are influenced by bitcoin and Ethereum their token values is bound to fall in the coming days.
It was recently hinted that EOS had been over sold by the Relative Strength Index (RSI) which remained at 27.8 percent. As the downtrend continues the coin will be tackling worse days than other coins.
One should know that less popular coins like ICON, Ontology and 0x outperformed larger players in the month of April and May. Unfortunately, even they are not able to dodge the market trend and have been grounded by huge losses. If BTC falls below the $5,000 mark then other tokens will be left to fend for themselves.
It would be interesting to see if EOS comes out of the dark days to reclaim its position in the crypto sphere. Some of the experts still back up BTC and consider downfall as part of the cycle which will bring back glorious times for the most popular and ridiculed digital coin of the world.