EOS price nears a key support level as it erases the YTD gains

EOS (EOS/USD) price has come under selling pressure as a somber mood engulfs the stock and cryptocurrency market. The coin dropped to a low of $0.8578 on Tuesday, the lowest level since January 4 of this year. It has crashed by more than 35% from its highest level this year.

EOS Foundation and Block.one (B1) tussle continues

Most cryptocurrency prices have moved sideways in the past few days as investors focus on the ongoing debt ceiling issue in the US. Bitcoin has been hovering at $27,000 while Ethereum has been stuck at around $1,800. 

The main concern is that the US will default on its financial obligations if Democrats and Republicans fail to agree on how to raise the debt ceiling. Such a move will have major implications for the American economy, including higher unemployment rate and lower asset prices.

Still, analysts believe that the two sides will ultimately agree before the June 1 deadline. This explains why assets have not dropped rapidly recently.

There have been two major EOS news recently. First, EOS announced that it will add Ethereum Virtual Machine (ECM) capabilities in its ecosystem. An EVM is a piece of software that makes it possible for developers to run Ethereum smart contracts. It is one way in which blockchains attain interoperability. Most blockchains like Zilliqa and Cardano have all implemented EVM compatibility.

Second, the tussle between EOS Foundation and B1 escalated. For starters, EOS Foundation was started to be an independent entity to build EOSIO. It was established by Block.one, which raised over $4 billion during its Initial Coin Offering (ICO). B1 was supposed to provide support and financing to the foundation.

In a letter, Yves La Rose, the head of EOS Foundation lamented about the lack of support. As a result, he suggested that token holders should sue B1 and implement a hard fork that excludes B1. He said:

“If enough token holders are interested in making a legal claim, a class action lawsuit is a possibility. The EOS Network Foundation is prepared to assist in bringing EOS token holders together for the purpose of advancing a claim against B1.”

EOS price prediction

EOS chart by TradingView

The daily chart shows that EOS price has pared back most of the gains it made earlier this year. It is now approaching the important support level at $0.8252, the lowest level in December last year. The coin has also crossed the 50-day moving average and the important support level at $0.9696, the lowest level on March 11.

Therefore, the path of the least resistance for the coin is downwards, with the next key support being at $0.8252. A move below this level will see it crash to below $0.9200.