As a market crash takes place, belongings turn out to be oversold and sometimes there’s an “oversold bounce,” “return to mean,” “mean reversion,” or some price snapback to the backside of the pre-crash vary.
Afterward, the asset beneath examine 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’s all fundamental buying and selling 101.
This week Cosmos (ATOM) price seems to be following this path, and the altcoin is exhibiting a little bit of energy with a 35% acquire since Aug. 22. But why?
Depending on the way you take a look at it, and technical evaluation is by all means a subjective course of, ATOM price is both in an ascending channel, or one might say a rounding backside sample is current with price near breaking above the neckline.
Resistance above $13 (the horizontal black line in the backside chart) is at present near being examined, and with ample quantity and “stability” from the wider crypto market, the price might be en path to the 200-day transferring common at $17.20.
Of course, if Bitcoin goes stomach up at the each day shut, or hawkish discuss begins to leak out of Jackson Hole, the entire bullish construction for ATOM is possible kaput. So, if one is buying and selling, put together and dimension accordingly.
If price manages to achieve the $17 zone, with out skipping a beat, your favourite technical analysts will then say one thing alongside the traces of:
“If ATOM price manages to flip the 200-MA to support, continuation to the $27 level could occur.”
Surely you’ve seen that on Crypto Twitter these days, but let me discover an instance.
I purchased this $ATOM retest as it has been main the market
Looking for a transfer in direction of $14.4 so long as the lows maintain right here. pic.twitter.com/FjP8mzdFHK
— CryptoGodJohn (@CryptoGodJohn) August 25, 2022
So, it’s solely up, sir?
What merchants want to seek out out is whether or not ATOM’s upside momentum is merely the results of a “stable” market and Bitcoin and Ether buying and selling in a comparatively predictable vary, or if there is some Cosmos-related set of fundamentals that validate the present transfer and warrant opening a swing lengthy.
Apparently, the analysts at VanEck, a multibillion-dollar asset administration fund, suppose ATOM price will do a 160x transfer by 2030.
Hard to imagine, isn’t it? The prediction is maybe somewhat bit far fetched, but see for your self. Here’s what they mentioned:
“Based on our discounted cash flow analysis of potential Cosmos ecosystem value in 2030, we arrived at a $140 price target for the ATOM token, with downside to $1. With ATOM’s price at $10 as of 8/2/2022, we like the 14-1 odds presented and believe this is a buying opportunity for the token.”
Let’s take a quick take a look at their rationale for $140 ATOM.
Product-to-market match and a safe cross-chain bridge might 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 exchange data, messages, tokens and other digital assets.”
According to the analysts, “IBC architecture then enables each blockchain to perform activities on another blockchain without relying upon a trusted third party.” They continued:
“The permissionless and trustless communication technology of IBC solves many of the issues presented by trusted bridging solutions that have led to over $1B in funds stolen through 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 soon-to-launch “interchain security” mechanism by the Cosmos Hub as causes for their long-term bullish perspective.
What’s taking place on the improvement aspect and roadmap?
ATOM is set to turn out to be a main collateral asset in three new stablecoins that can launch inside the Cosmos ecosystem.
Why $ATOM is mooning?
The important collateral in three new @MakerDAO impressed stablecoins in the @cosmos ecosystem:$USK by @TeamKujira $IST by @agoric $CMST by @ComdexOfficial
These 3 chains will want $Atom to mint their stablecoins, locking up the provide.
— Ericzoo.eth (@ericzoo) August 24, 2022
Minting stablecoins would require the “lock,” or depositing, of ATOM tokens and, in accordance with the Cosmos Hub 2.0 roadmap, liquid staking is additionally anticipated to roll out in H2 2022.
During DeFi Summer 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 stress to a protocol’s native token, whereas additionally equipping it with utility inside numerous elements of the lending, borrowing and leveraging wings of decentralized finance.
Current knowledge from Staking Rewards reveals that 65.84% of issued ATOM tokens are staked for a minimal yield of 17.85%, and extra knowledge from the analytics supplier reveals a close to 189% rise in the variety of ATOM stakers over the previous 30 days.
The above seems to align with the thesis that liquid staking and stablecoin minting will quickly launch. Despite the confluence of those bullish indicators, it’s essential to keep in mind that asset costs don’t exist in a vacuum. While there could also be a handful of bullish indicators flashing from ATOM, the wider cryptocurrency market (together with BTC) hangs at a precipice.
No one is certain that the elusive “bottom” is in and cryptocurrencies are risk-off belongings that exist in a macroeconomic local weather the place most institutional and retail traders are against danger. 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 in the previous. But the whole lot works till it would not, proper?
Remember Waves, Terra (LUNA) and Celsius (CEL)? All experimented with liquid staking, lending, asset collateralization and stablecoins, and but at the moment they’re stomach up from a worth perspective.
Of course, Cosmos isn’t LUNA, Waves or CEL. It’s a wide-ranging, cross-chain geared up ecosystem with a $12.6 billion market capitalization, in accordance with knowledge from CoinGecko.
The views and opinions expressed listed below are solely these of the creator and don’t essentially replicate the views of Cointelegraph.com. Every funding and buying and selling transfer includes danger, it’s best to conduct your individual analysis when making a call.