The EOS/USD was trading near 5.3727-fiat at the beginning of the Asian trading session. Helped by the prevailing bullish sentiment in its own – and across – cryptocurrency market, the pair continued to trend upwards as the session matured.
Speculators seem to have driven the latest EOS rally after taking cues from the blockchain project’s decision to launch their long-planned referendum system. The EOS blockchain currently has an account which has $35 million worth of tokens in it. The rulebook says that these funds can only be allocated for the development of EOS blockchain project. But so far, the team had not built a system that can decide how to allocate the sum. On the top of that, the wallet funds expect to grow to as much as $200 million in the next 12 months thanks to a pre-built system that increase the total EOS token supply every year by 5 percent.
The EOS referendum system is a step forward in the direction of building a democratic decision-making process. While not everybody is happy with the proposal, fearing one-toke-one-vote system would get centralized by people with higher amount of tokens, the announcement itself has proven strongly bullish to the EOS token value.
The EOS/USD so far was trading inside an ascending parallel channel, but the latest rally is now pushing the pair above the resistance line. We can see price forming higher highs towards 6.5025-fiat while eyeing a breakout towards the 50% Fibonacci retracement level at 6.5952-fiat of the last leg from 8.9827-high to 4.2076-low. In medium-term, a potential upside is near around the 61.8% Fibonacci of the same leg, also because it would form a reverse Head & Shoulder pattern on shoulder support near 6.0317-fiat and head near 4.2076-fiat, the EOS bottom.
The sentiment in the market is, of course, bullish, with the price now trading above its 200H and 100H MA. At the same time, the RSI and Stochastic indicators both have entered their overbought areas, which means a potential correction could be underway. The price, in that case, would be well-supported by the 200H MA, with a sight towards 6.0317 as the next potential support level.