EOS Price Analysis: EOS/USD Behavior Spells Potential Danger Following Voting Manipulation Allegations

  • EOS has been under fire of late, following reports of a leaked document from a Huobi employee.
  • It indicates voter collusion between Huobi and Chinese EOS block producers.
  • EOS/USD has been on the move lower, as the price remains within a bearish pennant pattern.

Collusion Details

Huobi is one of the largest crypto-exchanges in the world, based in Singapore. There is a leaked spreadsheet that is doing the rounds, from an employee of Huobi. It appears to indicate of collusion, i.e. block producers voting for each other. Huobi is also said to have been receiving payments from other block producers.

Maple Leaf Capital, an investor of EOS, has further made the market aware of this collusion. Much attention has been on their Twitter account of late, after stating that “Recently, an internal excel document from Huobi (one of the BPs) is circulating in the Chinese community. This file documents the collusion, mutual voting, and pay-offs that occur amongst the Chinese BP community”. Details and documents were expressed via their twitter account.

The documents had revealed that Huobi voted for 20 BPs and 16 of them voted for Huobi in return. It was also believed from the details that Huobi was earning around 1,116 EOS per day from this alleged manipulative action.

Since the surfacing speculation, local Chinese newswires, Jinse, reported that Huobi has kept distance between itself and these reports of collusion, with other EOS block producers. Elsewhere, it was further covered by cnLedger in a tweet, that “Huobi denies having financial business with the nodes ($EOS BPs) in the leaked spreadsheet. However, they have not yet denied the authenticity of the leaked file. “Relevant information is still under further investigation”.

Technical review

EOS/USD price has been edging lower over the past three sessions, whether it is coincidental or not, there is evident pressure to the downside. Since 28th September it has fallen over 9%, after testing the upper part of a pennant pattern. It has been dictated by this trend since 7th August during a falling market; the price then went on to stabilize on 13th August. Since the relative mentioned stabilisation, EOS/USD has been moving within a sideways nature. This generally tight trading is being observed with some of its peers across the board. The textbook pattern does suggest another drop could very well be looming. This of course is not being helped by the negative attention around the EOS network that is currently trending.

EOS/USD daily chart

Support to the downside is eyed immediately at $5.40, which is where the 50DMA is currently tracking. This over the past few sessions have proven to be of some comfort for a softer price. Further south, eyes will be on the lower part of the pennant, to see of its strength. It is tracking at $5.12, a failure to hold could invite a quick retest of 13th August low, $4.17. Looking to the upside, resistance is seen just ahead at $5.95, the upper part of the mentioned pattern. A breach will likely see a test of the 100DMA $6.47, then the 23.6% Fibonacci, $6.84, which forced a price rejection on 1st September.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

Ken has over 8 years exposure to the financial markets. During a large part of his career, he worked as an analyst, covering a variety of asset classes; forex, fixed income, commodities, equities and cryptocurrencies. Ken has gone on to become a regular contributor across several large news and analysis outlets.