Augur Market Update: REP holders bet heavy on US presidential elections, effect on price non-existent

• REP holders have been more than $111,000 in the upcoming US elections.
• REP has entered a consolidation phase and is trending horizontally around $14-mark.

Augur’s prediction markets are buzzing right now about the upcoming US elections. The DeFi protocol currently has three markets open right now that have accumulated more than $111,000 in bets over the forthcoming US elections. Following the first presidential debate, Biden has opened as a favorite in these markets.

Augur seems to have gone all-in on the elections, going so far to create YTRUMP and NTRUMP tokens. Some users have started trading these tokens on Uniswap and Balancer. 

However, despite an increase in network usage, the effect on REP’s price has been minimal.

REP/USD daily chart

REP has entered a consolidation phase and has been trading horizontally around the $14 mark for the last eight days. This has forced the Bollinger bands to squeeze on its daily chart. Squeezes are indicative of low volatility periods and are usually succeeded by significant price movements. The longer the squeeze, the higher the probability of a strong breakout.

This technical index does not provide a clear path about the direction of REP’s trend. As a result, the area between the lower and upper band is a reasonable no-trade zone. Only a candlestick close above or below this area will determine where the DeFi coin is headed next.

Having said that, we can still reasonably guess the long term market sentiment by checking out the 3-day chart.

REP/USD 3-day chart

After reaching a high of $27.60 on August 19, the price has been on a steady downtrend. The trading volume chart shows us that the market has been under overwhelming selling pressure. The latest candlestick looks like a potential gravestone doji. This doji is formed when the open, low, and closing prices are near each other with a long upper shadow. This is usually a bearish sign, which suggests a further downtrend.

This bearish thesis is supported by the fact that both the SMA 100 and SMA 200 curves act as immediate market resistance, and the MACD indicates sustained bearish momentum.

If this breakout does happen, then the $12.65 support level must stay strong to prevent a catastrophic fall.

What is Augur?

Augur is a decentralized oracle and prediction market that empowers REP holders to create no-limits using diverse subject matter questions. In prediction markets, participants make decisions on future events and outcomes. Examples of these events include the sales of a company, commodity price, outcome of a sports event, election results, etc.

At the core of prediction markets lies the philosophy of “wisdom of the crowds.” The idea here is that large groups of people can collectively make far more accurate and smarter decisions that individuals. The great Aristotle first observed this concept when he noted that a random potluck dinner prepared by many people often provides a much more satisfactory experience rather than a whole feast cooked by one person.

As of press time, approximately $560,000 is locked up in the Augur smart contract.