The bearish movements which have taken place over the past week have not had a good impact on Ethereum or EOS. Both provide a decentralized platform to build smart contracts and DApps and have their cryptocurrencies as a key part of how the platforms function.
Ethereum which has been the largest altcoin by market cap for the vast majority of 2018 has been overtaken by Ripple's XRP which provides a liquidity solution to emerging markets. EOS which was ranked fifth in terms of cryptocurrencies by market cap was overtaken by Stellar Lumens. Stellar Lumens was a project started by a departing member of the Ripple XRP team.
The declines have bee hitting almost all cryptocurrencies, but some have been holding their value better than others. Smart contract platforms such as Ethereum and EOS have been experiencing some of the largest declines. There could be numerous reasons for these declines. Investors may be losing confidence in the applications of blockchain due to slow adoption or may be questioning the value of the cryptocurrency central to these platforms.
In terms of technical analysis, both Ethereum and EOS had been forming higher lows since around August/September. This is typically a sign of a market after finding its bottom, but these recent bearish movements have brought prices to new lows. Declines have been on large volume showing significant strength behind the sell-offs. The momentum is with the sellers with both the RSI and MACD decreasing.
Although the series of higher lows looked as if it was forming a more bullish set up for these cryptocurrencies, both have mostly followed the market this year. With the market leader Bitcoin breaking below several key levels such as $5000 and $4600, it is important to monitor the price action of Bitcoin as it has an important impact on cryptocurrencies such as Ethereum and EOS.
Bitcoin formed a 2018 low today around $4200 and with momentum strongly on the side of sellers, there is a strong possibility it could return to this low and approach $4000. A move below $4000 may catalyze another significant sell-off across the cryptocurrency market.
Featured Image from Shutterstock.
John Lee Quigley's background is as a trader in derivatives and equities. When John first came across cryptocurrencies, he was instantly intrigued and viewed the high levels of volatility that scare away most traders as a market that provides great opportunities. Since 2018, John has been focussing on cryptocurrencies and blockchain full-time and has co-built the Crypto Bay community in Lisbon, Portugal. John specializes in technical analysis and fundamental analysis of cryptocurrencies and crypto-related projects.
11/20/2018 / 16:29:07 Source: blokt