The EOS token is very new, and there is not a lot of information about it. But, let’s look at what we do know: the EOS.IO software enables horizontal scaling of decentralized applications, the intent of which is to make the deployment of smart contracts and decentralized applications (ĐApps) quick and easy. The EOS token serves two purposes: first, any application that is built on the EOS software requires some EOS tokens to be staked in order to use the services provided on the network. Second, developers of these decentralized applications receive EOS tokens as a reward for their work.
As the saying goes, ‘all good things come to an end’ and the same goes for the bear market that gripped the cryptocurrency markets for the last eight months. The price of EOS, which had been trading in a tight range between $2.5 and $3.5 for the past few weeks, suddenly jumped 100% in three days. While the move had everyone wondering what happened and what’s next, we want to take a closer look at three factors that could be behind the rally.
After a parabolic rise that began in March, EOS’s share price reached double digits for the first time since mid-2018.
According to Coingecko, the cryptocurrency, which ranks 20th in the world in terms of market capitalization. is currently above the $11.50 mark and has gained nearly 100% in the past three days.
First: EOS’s current upward movement is at the intersection of two unique price trends. On the one hand, the EOS/Tether (USDT) exchange pair is at the top of its 2021 range, but on the other hand, the token’s price against bitcoin (BTC) has fallen to a three-year low in early March.
At the time of writing, the EOS/BTC price action has broken a nearly three-year downtrend, indicating the possibility of a significant bullish move.
Second, as bitcoin’s dominance continues to wane amidst the massive growth of altcoins, tokens from large capitalizations appear to be on the rise in the market cycle. Indeed, major alts like Bitcoin Cash (BCH), Ethereum Classic (ETC), Chainlink (LINK) and Polkadot (DOT) have seen their prices rise rapidly.
The rise in altcoins was further boosted by Ether (ETH) reaching new all-time highs.
EOS follows the pattern and gets enough momentum to show significant price action strength against bitcoin. At the time of writing, the EOS/BTC exchange pair is up 76% over the past 24 hours.
A third likely explanation for EOS’s breakthrough could be related to the recent announcement of a bid premium. As Cointelegraph previously reported, the EOS community is considering a proposal to increase auction rewards.
The recommendation to increase rewards for offers is based on a report commissioned by Block.one. This could be the next big success of the EOS network, following the PowerUp model which allows users to pay for one-off transactions within 24 hours.
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