As a market crash takes place, belongings change into oversold and usually there’s an “oversold bounce,” “return to imply,” “imply reversion,” or some worth snapback to the underside of the pre-crash vary.

Afterward, the asset beneath research both consolidates, continues the downtrend, or returns to the bullish uptrend if the draw back catalyst was not vital sufficient to interrupt the market construction. That is all type of primary buying and selling 101.

This week Cosmos (ATOM) worth seems to be following this path and the altcoin is exhibiting a little bit of power with a 35% achieve since Aug. 22, however why?

Relying on the way you take a look at it, and technical evaluation is by all means a subjective course of, ATOM worth is both in an ascending channel or one may say a rounding backside sample is current with worth near breaking above the neckline.

ATOM each day chart. Supply: Tradingview

Resistance above $13 (the horizontal black line within the backside chart) is at present near being examined and with ample quantity and “stability” from the broader crypto-market, the value could possibly be en-route to the 200-day transferring common at $17.20 .

In fact, if Bitcoin goes stomach up on the each day shut, or hawkish speak begins to leak out of Jackson Gap, the entire bullish construction for ATOM is probably going damaged. So if one is buying and selling, put together and measurement accordingly.

If worth manages to succeed in the $17 zone, with out skipping a beat, your favourite technical analysts will then say one thing alongside the strains of:

“If ATOM worth manages to flip the 200-MA to help, continuation to the $27 stage may happen.”

Certainly you’ve got seen that on crypto Twitter these days, however let me discover an instance.

I purchased this $ATOM retest as it has been main the market

In search of a transfer in direction of $14.4 so long as the lows maintain right here.

— CryptoGodJohn (@CryptoGodJohn) August 25, 2022

So it is solely up, sir?

What merchants want to seek out out is whether or not ATOM’s upside momentum is solely the results of a “secure” market and Bitcoin and Ether buying and selling in a comparatively predictable vary, or is there some Cosmos-related set of fundamentals which validate the present transfer and warrant opening a swing lengthy?

Apparently, the analysts at VanEck, a multi-billion greenback asset administration fund, suppose ATOM worth will do a 160x transfer by 2030.

Arduous to imagine is not it and maybe a bit of bit far fetched, however see for your self. This is what they stated:

“Based mostly on our discounted money movement evaluation of potential Cosmos ecosystem worth in 2030, we arrived at a $140 worth goal for the ATOM token, with draw back to $1. With ATOM’s worth at $10 as of 8/2/2022, we just like the 14-1 odds introduced and imagine it is a shopping for alternative for the token.”

Let’s take a short take a look at their rationale for $140 ATOM.

Product to market match and a safe cross-chain bridge may thrive put up Merge

VanEck analysts Patrick Bush and Matthew Sigel cite Cosmos’ Inter-Blockchain Communication Protocol (IBC) as a bullish catalyst primarily as a result of “separate Cosmos SDK blockchains can open up communication channels to alternate knowledge, messages, tokens and different digital belongings.”

In accordance with the analysts, “IBC structure then allows every blockchain to carry out actions on one other blockchain with out relying upon a trusted third social gathering.” And it’s this “permissionless and trustless” facet of IBC which:

“…solves most of the points introduced by trusted bridging options which have led to over $1B in funds stolen by way of bridge hacks.”

The analysts additionally cite the Cosmos SDK, clear product to market match and robust token worth accrual being partially influenced by staking and a quickly to launch “interchain safety” mechanism by the Cosmos Hub as causes for his or her long-term bullish perspective.

What’s taking place on the event aspect and roadmap?

ATOM is about to change into a main collateral asset in three new stablecoins that can launch throughout the Cosmos ecosystem.

Why $ATOM is mooning?

The principle collateral in three new @MakerDAO impressed stablecoins within the @cosmos ecosystem: $USK by @TeamKujira $IST by @agoric $CMST by @ComdexOfficial

These 3 chains will want $Atom to mint their stablecoins, locking up the provision.

— Ericzoo.eth (@ericzoo) August 24, 2022

Minting stablecoins would require the “lock” or depositing of ATOM tokens and based on the Cosmos Hub 2.0 roadmap, liquid staking can also be anticipated to roll out in H2 2022.

ATOM roadmap particulars. Supply: Cosmo’s Hub

Throughout DeFi Summer season and the post-summer revival, stablecoin issuance and liquid staking had been two phenomena that boosted TVL for DeFi-oriented blockchains and whereas questionable and considerably ponzi-esque, liquid staking provides purchase strain to a protocol’s native token, whereas additionally equipping it with utility inside varied facets of the lending, borrowing and leveraging wings of decentralized finance.

Staked share of ATOM’s circulating provide. Supply: Staking Rewards

Present knowledge from StakingRewards exhibits that 65.84% of issued ATOM tokens are staked for a minimal yield of 17.85% and extra knowledge from the analytics supplier exhibits a close to 189% rise within the variety of ATOM stakers over the previous 30-days.

30-day enhance in ATOM stakers. Supply: Staking Rewards

The above seems to align with the thesis that liquid staking and stablecoin minting will launch quickly. Regardless of the confluence of those bullish indicators, it is essential to keep in mind that asset costs don’t exist in a vacuum. Whereas there could also be a handful of bullish alerts flashing from ATOM, the broader cryptocurrency market (together with BTC) hangs at a worth.

No-one is bound that the elusive “backside” is in and cryptocurrencies are risk-off belongings that exist in a macroeconomic local weather the place most institutional and retail traders are against threat. The worth accrual propositions for ATOM are robust and staking, stablecoin minting and liquid staking proved to be highly effective bullish catalysts for DeFi tokens and altcoins up to now. However every part works till it does not, proper?

Bear in mind Waves, Terra (LUNA) and Celsius (CEL)? All experimented with liquid staking, lending, asset collateralization and stablecoins, but at this time they’re stomach up from a worth perspective.

In fact Cosmos is not LUNA, Waves or CEL. It is a wide-ranging, cross-chain ecosystem outfitted with a $12.6 billion market capitalization, based on knowledge from CoinGecko.

The views and opinions expressed listed here are solely these of the writer and don’t essentially mirror the views of Each funding and buying and selling transfer includes threat, it is best to conduct your personal analysis when making a choice.


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