In the anticipation of the upcoming Mainnet launch on June 2, EOS prices and market cap rose exponentially. However, today, its prices took a strike and EOS price went down to $18.35. After experiencing such a great month, it is expected that a correction has to take place, though its extent is yet to be discovered.
After gaining billions in market cap, EOS price takes a steep drop
At the beginning of April, EOS coin was riding at $5.30 that reached the height of $21.26 in the morning today, registering a rise of approximately 300 percent. In just a month, the market cap of this cryptocurrency reached $17 billion a few days back. Ranked at the 5th number, EOS price took a hit today as it dropped down about 13.19 percent while sitting at $18.35.
With a sudden and substantial rise in the price of EOS, it makes sense that a correction has taken place. But the point of concern here is if this correction will be huge given the fact that this cryptocurrency saw a huge price rise during the entire month.
The primary factor for the surge in EOS price has been its upcoming Maninet launch that is scheduled for June 2. On this day, EOS will migrate from the Ethereum platform to its very own blockchain.
This transition from Ethereum to EOS blockchain will deliver a set of benefits such as increased transaction speed. However, it will also involve the transfer of ethereum token to EOS blockchain which will then become EOS coin. A number of market observers aren’t really convinced with EOS tokens’ overvaluation and furthermore, there is no clarity on what exactly will happen to the ethereum’s token that simply won’t disappear.
A correction was in order, but will it continue?
By taking up over 12 percent of the total trades for a day, EOS has certainly become a hot digital currency, so much so that it’s activity goes far above ethereum’s. This can further drive the momentum but industry experts believe a steep correction could be in order that might have been already started with today’s price drop.
Recently, EOS trade has been extremely active on OKEx exchange that was driving the USDT volumes. When it comes to securing the gains, USDT plays an integral point and given that EOS is paired with Tether, this could also be the reason for the hike in EOS prices.
Moreover, EOS/BTC pair is very active on Binance so much so that it comes after the BTC pairings, accounting 10 percent of the total volume of the exchange. However, the lack of a fixed price asset here means a correction would take place.
A point worth noting here is EOS uses a Delegated Proof of Stake System which has about 21 Block Producers that contains all the power of the network. Though they can be voted out, there is no clarity or explanation of this process.
A correction was surely needed after such a great hike in EOS prices. But it’s yet to be known if the currency dump will continue or the prices will recover as a number of altcoins are also experiencing a dip right now.
Do you think EOS price will retract to $10 level or will it soon rise to $25 in anticipation of its mainnet launch? Share your thoughts with us in the comment section below!
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I am an associate content producer for the news section of Coingape. I have previously worked as a freelancer for numerous sites and have covered a dynamic range of topics from sports, finance to economics and politics.