Article structure notification: the article is divided in three sections. First section is focused on short-term, technical and speculative analysis of the project – this is regularly updated part of the article. Second section is focused on general market and sentiment analysis and third section is focused on the long-term, fundamental analysis and future prediction of the project – this is occasionally updated part of the article.
Mid May Update: Technical Analysis
Electroneum has managed to temporarily stop the slide into nihility and closed couple of green daily candles but then again slumped and started dipping down to 44 sats all time low. The thorny path back above the crucial resistance line at 85 sats is still uncertain.
With no fundamental driving forces in sight and decreasing speculative forces, it is hard to hold ETN and akin tokens. Couple of prolonged altcoin springs like the short-lived one couple of days ago, can alleviate the pain of holding heavy bags but a sustainable long-term future is still doubtful.
ETN will more likely be kept around this area and wait for general bull market to prowl its way among legit projects and rekindle the 2017 frenzy. If the alts season doesn’t come along soon, this might be it for Electroneum.
You can see that ETN struggles to stay above the 69 sats area which is a confluence of two Fib levels. It managed to close two candles above it but formed a double top and has since fallen to the current price of 56 sats. EMA20 is about to make a bearish cross with MA50, a further indicator of value loss for ETN.
ETN is below every moving average and EMA20 is the first one that needs to be broken, at 72 sats. Then comes the big resistance at 85. This would be ETN’s breakout level, should ETN pass over it, 97 sats and confluence of Fib50 and MA50 is the next resistance.
Days when a project could pump on irrational shilling on social media are over – lackadaisical developers and sporadic, cosmetic updates to client or wallet interface don’t cut it anymore – nonsensical “conferences” and meetups even less so.
Even the most credulous noobs are more wary of vaporware projects and steer clear of them in 2019. Electroneum either needs to deliver real, unique value to the market or just dissipate, leaving couple of lucky gamblers who caught its huge pumps back in day happy and a lot of miserable holders who got stuck with worthless bits of data, represented by the soon to be meaningless three letters glimmering on the screen – ETN.
One thing to bear in mind is the turbulent and erratic nature of bitcoin – a sudden thrust up or slide down is always on the cards which would invalidate this and all other analysis and predictions. In such cases, market is shaken up with most traders exiting altcoins and entering bitcoin positions or seeking shelter in stablecoins, especially in the initial phases of bitcoin pumps and dumps. So it is always a good idea to keep a close eye on bitcoin’s behaviour before opening a long or a short on any other coin in the market.
Should this happen, stop by again to check out our updated charts and thoughts.
Trading volume is miserably scanty – reported volume in the last 24hrs is $220k and “Real 10” (trading volume on the exchanges that provably prevent wash trading) volume is of course non-existent since ETN is not listed on any legit exchange.. This means that ETN’s liquidity is highly likely completely fabricated.
Moreover, ETN comparatively has a paltry buy support, according to coinmarketbook.cc. Buy support is measuring sum of buy orders at 10% distance from the highest bid price. This way we can eliminate fake buy walls and whale manipulation and see the real interest of the market in a certain coin. ETN currently has a laughable and negligible $122k of buy orders measured with this method, which sets ETN buy support/market cap ratio at 0.23%, a very low value. Bitcoin and Ethereum have a 0.27% and 0.28% ratios, respectively. This novel metric indicates there are a lot of manipulations, inflated liquidity and fake orders on all crypto trading pairs, including ETN pairs.
All communities of Electroneum are barren wasteland: ETN subreddit, Telegram and Twitter discussion around the project is spotty and insubstantial as shown by the graphs below (Datalight and cryptosub.live are the sources)
Mid May Update: Fundamentals
To assess fundamental health of a project, we used the FCAS metric. FCAS is a comparative metric whose score is derived from the interactivity between primary project lifecycle fundamentals: User Activity, Developer Behavior, and Market Maturity.
There are a few sub components which provide data to each fundamental:
User Activity is comprised of Project Utilization and Network Activity
Developer Behavior is comprised of Code Changes, Code Improvement and Community Involvement
Market Maturity is comprised of Liquidity and Market Risk. Market Maturity has less than 5% impact on a project’s overall FCAS.
FCAS ratings are on a 0-1000 point scale with a corresponding letter grade. Break points are based on standard deviations in the underlying component distributions.
900 – 1000 is marked as S for superb. 750 – 899 is marked as A for attractive. 650 – 749 is marked as B for basic. 500 – 649 is marked as C for caution. And finally, below 500 is marked as fragile. You can read more about it here.
Electroneum has been ranked as the F category – fragile with overall 404 points as of May 6th. By far the strongest metric that contributed to this great score is developer activity that got 558 points, followed by market maturity that had 433 and the last metric is user activity or utility where ETN received pathetic amount of 200 points. So this is a data-backed claim that ETN is essentially worthless.
Below are some of the most important news around the project in the last 30 days.
- Not much to list here since there is little to no activity around ETN aside of sporadic and vague updates by the team. Latest one on Reddit says that their South Africa expirement goes better than imagined and that “There is a great vibe everywhere we visit.” Additionally, developers are looking into reported issues with their app and also “KYC process is running very efficiently now, it’s down to just one working day waiting time as of this moment.”.
Below is our long-term forecast where we cover general market movements and sentiment shifts before delving deeper into the specific predictions for ETN.
Electroneum (ETN), is a British cryptocurrency that was originally developed to be used in the mobile gaming and online gambling markets. They have since pivoted to add more use cases and essentially aim to be cheaper, mobile-friendlier and faster bitcoin. The name of the company and the currency is derived from “the electron which all cryptocurrencies rely on.” Electroneum is built on its own bitcoin-derived blockchain and claims to be “the world’s first common cryptocurrency.”
It aims to be a huge change of pace in the market and is designed with mobile-friendliness, fast transactions, and easy micropayments in mind. According to its website, Electroneum has the benefits of Bitcoin and other assets, but claims to be a vast leap forward over its cryptocurrency competitors. Also, Electroneum is built for widespread common usage and offers “groundbreaking ease-of-use for the ordinary mobile user,” which means that it could be a powerful investment opportunity that will almost certainly increase in value.
That all sounds good. However, there are many other cryptos that make similar claims. And a lot of them are already in the crypto graveyard because promising is easy, delivering on the promises is hard. Electroneum had a tough year behind it, price-wise it is in a gutter (just like the rest of the market) but the team appeared to produce some updates and there was some activity around the project.
Bleak year behind Electroneum
We already covered the bleak future of Electroneum in the eyes of respectable crypto analysts Nic Carter with one of them saying:
“Like most ICOs, it’s a priori nonsense, but it did enjoy a brief moment in the sun as the development team (whose main expertise is online marketing) managed to drum up substantial hype, leading the asset to peak at a $900m market cap. In fact, one of my abiding memories of the late 2017 mania was sitting on a plane next to an earnest young fellow who informed me that his favorite cryptocurrency was Electroneum because you could mine it on your phone. Of course, this wasn’t actually mining, but rather an empty proof of time concept whereby you were allocated units of ETN just for having the app open.
It doesn’t take much to realize that ETN is hollow. It’s a generic ICOed fork of Monero with no distinguishing features by a team with no technical expertise. Some minimal development is ongoing, albeit at a very slow pace.
Notable event: The highlight of 2018 was the ETN team forcing every ICO investor into a KYC process.
Verdict: Electroneum is in a purgatory where it’s obviously a failed project but still piddling along until the SEC makes their way down the list and makes the team give all the money back.”
Beta iOS app ready after numerous missed deadlines
Electroneum had a great promise of being a easy to use especially on mobile devices. It has yet to live up to it promises with native wallets.
Over a year waiting for the wallet to be released with an iOS native app that saw a light of a day only a week ago and that as a beta version. They have missed multiple deadlines and as a result the currency dropped of the cliff in terms of interest in it.
With this new app, you can do “cloud mining”, while having to reactivate your app every 7 days. All it takes is a selfie to prevent bot activity. It doesnt cost any money, nor data or power. Its not really like mining to be honest. You cannot withdraw ETN until you’ve mined 100 tokens.
Reduced rewards for “mining”
ETN is a proof-of-work crypto currency based on the CryptoNight hash algorithm. It was forked from Monero and aims for mass adoption as an “enablement currency” through mobile applications and instant payment technology, particularly in the developing world.
Typically, cryptocurrencies are mined with specialist equipment. However, Electroneum allows users to “mine” the currency with the mobile app, which should lead to increased adoption and use of ETN. The app allows your phone’s CPU to engage in simulated mining, which won’t overheat your phone or drain your battery. The mobile mining won’t actually help confirm new blocks on the blockchain – it’s more clever marketing by Electroneum to promote interaction with Electroneum and get people involved. Even though you’re not really mining but rather a simulation with a proof of elapsed time, you’ll still receive rewards. One more thing worth noting is that the mining will also use a negligible amount of your internet data.
Announcement made by Electroneum that they will be raising the payout threshold from 10 ETN to 100 ETN was met with disappointment and discontent of their community.
How to evaluate fundamentals of a crypto project
We should consider crypto valuations like educated gambling, a ‘prediction market’ where we are betting on the odds of project and token success. There are some catalysts of success we can identify:
- Project success drivers (user traction, strong financial bottomline, good treasury management, network effects/synergies between users and token investors)
Real user traction is the most important driver of success, that is what most of holders call “adoption”. If people start using certain crypto project because they find it useful and it makes their life easier, that is a guarantee of success. So far, almost no crypto project can claim to have done so.
Strong financial warchest that will enable teams behind the project to develop their visions, incentivize other developers to join them and start using their product is also a crucial aspect of any project. Tied into it is treasury management – especially for the project that had big ICO proceeds. Temptation to squander all those millions into “conferences and events” (read hard-core partying on yachts and luxury hotels) was massive, especially if we consider that majority of token projects founders were no-names and ordinary employees that worked for a paycheck before the ICO fairy-tale happened to them.
Another adoption indicator – network effects, where every additional user of a good or service adds to the value of that product to others. When a network effect is present, the value of a product or service increases according to the number of others using it.
If you can objectively notice that your favorite token project has some of these traits happening for it, be happy – you might have found a winner.
- Token success drivers (favourable demand-supply dynamics, programmable incentives on token, aligned incentives with management team and consensus on token as common unit of value creation).
Token success is completely dependent on tokenomics. As defined by infloat.co, tokenomics involves the incentivization of certain stakeholders to ensure particular behavior.
So, tokenomics is essentially an incentive structure designed to ensure that a token has a purpose and utility within its native network. It is the study of how coins/tokens work within the broader ecosystem that can be considered as a sovereign micro-economy. This includes such things like token distribution as well as how they can be used to incentivize positive behaviour in the network.
For example, bitcoin is designed to ensure that bitcoin miners have a reason to mine new bitcoin. Miners validate bitcoin transactions and receive (or create) newly minted bitcoin in the process.
On the other hand, individuals, businesses and other bitcoin users pay a transaction fee for miners to include their transaction in the next block. This ensures that even when all bitcoin have been minted (to the tune of 21 million, which should happen in around 2140), bitcoin miners are still incentivized to keep ‘mining’ (i.e. validating transactions).
To paraphrase all of the above in the simplest terms: if you, after weeks of research and reading, can’t figure out why the project needs to have a token, it probably doesn’t.
So why does the token exist then?
– To make the project founders rich.
But there are some people on Twitter, Reddit, Telegram claiming otherwise.
-Yes, they are either: paid to do so by those same founders, they are desperate and delusional bad holders or they are just stroking their own ego with newly learned fancy economic terms and jargon.
Needless to say – stay clear of such projects.
Market Movements and Sentiment Shift
The downfall of altcoins that were mainstream media darlings at the start of the year, ETN among them, can be attributed, in part, to novice investors getting scared off once the bear market kicked in with a vengeance. Every resurgence of bitcoin in recent period, was met with the inability of altcoins to rally with it. Reason for that can be rookie investors learning from their mistakes, while smart money that was previously watching from the sidelines has begun to enter.
These entities weren’t about to buy BTC when it was trading at an all-time high, but they’ll take a look now, having missed the boat the first time around. None of them, it seems, are interested in altcoins however, despite the fact that many are trading at a 5x discount. Institutional investors may be cautious, but they’re not foolish.
ETN Price Prediction 2019
ETN, as the rest of the market, is tightly coupled and dependent on bitcoin’s price action. If bitcoin embarks on another bull run, ETN can hope for one as well. Since that is very unlikely, don’t expect much to change for ETN price-wise in this year. So 2019 will be a year of boring sideways action with minor bitcoin ignited jumps and slumps.
The main currency in cryptocurrency markets is Bitcoin and given this, altcoins tend to fuel Bitcoin runs and Bitcoin tends to do the same in return. Given this relationship, Bitcoin price movements (or lack thereof) tend to effect altcoin prices.
When Bitcoin goes up swiftly, it will likely:
- Suppress or depress altcoins as money flows into Bitcoin;
- Or, take altcoins along for the ride
In cases when Bitcoin plunges, it will likely:
- Depress altcoins as money flows into fiat;
- Or, cause altcoins to boom as money flows into them, but this is rarely the case.
When Bitcoin moves sideways, it will likely:
- Cause altcoins to mimic that as traders wait for a clear sign on the direction of the market;
- Or, cause altcoins to flourish as traders look for returns in altcoins and try to get favorable trades in terms of BTC pairs.
To summarize, Bitcoin is the focal point of the crypto market in many ways, and with BTC trading pairs on every exchange, the gravity of Bitcoin is hard to evade.
ETN-BTC Price Correlation
The vast majority of trading that occurs in the crypto markets are between BTC and Altcoin trading pairs. Since most Altcoins do not pair with fiat currencies (and only a few are paired with stable coins like USTD), Bitcoin is the next best option. Therefore, when Bitcoin is stable, it forms as the ideal base currency for buying Altcoins (which is why Altcoins tend to do well when Bitcoin goes sideways).
Correlation is measured on a scale from -1 to 1. Values above 0 shows the degree to which altcoin is moving in the same direction as BTC prices (either up or down in tandem), and values below 0 shows the degree to which altcoin moves in the opposite direction of BTC prices (so when BTC goes down, altcoin goes up, or vice versa). Values around 0 shows that when BTC price moves, altcoins stays steady, or alternatively that when altcoin moves up or down that the BTC price is staying steady.
ETN has had a correlation coefficient of 0.90+ up until January this year when it completely lost its ties with bitcoin as the correlation coefficient dipped towards zero territory, with occasional step over to the negative zone. This was mostly due to the fact ETN couldn’t follow suit bitcoin’s sudden jolts upwards; as shown on the image below – source.
The majority of projects will fail — some startups are created just to gather funds and disappear, some would not handle the competition, but most are just ideas that look good on paper, but in reality, are useless for the market.
What is the best crypto trading bot?
Vitalik Buterin, co-founder of Ethereum said:
“There are some good ideas, there are a lot of very bad ideas, and there are a lot of very, very bad ideas, and quite a few scams as well”
As a result, over 95% of successful ICOs and cryptocurrency projects will fail and their investors will lose money. The other 5% of projects will become the new Apple, Google or Alibaba in the cryptoindustry. Will ETN be among those 5%? Hard to tell but probability for that is pretty low.
All of this summed up means one thing: ETN might live through couple of orchestrated and, for a regular trader, completely unpredictable pumps but the majority of time will be murky sideways trading with tiny volume and no real interest from the market. Price will heavily depend on what BTC will do and since many analysts think BTC will not be making big moves in this year, it is hard to expect ETN will do them either. The price will probably leak slowly, drip by drip to even lower levels than this current one as the founders and big whales liquidate their bags.
All in all, not a good forecast for ETN price in 2019.
Enthusiasm is waning
If we are honest, ETN stands a minuscule chance of reaching a massive adoption and without it, this coin has no point and looks more like a marketing ingenuity of its founders than a revolutionary tech.
The amount of social media shilling of ETN is slipping, obscure Twitter and Reddit users who used to defend it to death are suddenly inactive. Excessive social media presence of a project with similar pattern of behaviour among allegedly different users is a good indicator that it is all engineered and orchestrated by someone. These accounts usually put out vague and hyperbolic statements, spewing out “facts” that no one can verify and vitriolically attack anyone who dares to criticize the so wonderful project that “they are not affiliated with in any way”. They are just white knights fighting for world justice.
For more detailed critique of their whitepaper, technicals and initial stages of their development – check this article out.
I am not saying ETN is a scam but their bar is set so high that even much bigger companies and more competent engineers would have trouble to reach it. Don’t get to excited by the cool concepts you hear from the team, the more big words you hear from a project, the more skeptical you should be. Everybody is “revolutionizing” something in crypto space, but in most cases, only their pockets get to see a revolution.
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