The demand for Cosmos (ATOM) has risen dramatically over the past few days, resulting in a significant surge in performance. According to CoinMarketCap, the ATOM price has fallen to $11.69 after gaining momentum. The current market cap of ATOM is $3.3 billion, with a 24-hour trading volume of $100 million. However, the trading volume is still down by 31.18%, indicating reduced network activity.
Cosmos is a rapidly growing network of interconnected blockchains created with developer-friendly application components. The Inter-Blockchain Communication (IBC) protocol is the technology that connects these apps. The SDK platform offered by Cosmos enables programmers to produce top-notch decentralized apps (dApps). Other developers have also built applications on top of it, such as MM Finance and VVS Finance.
Cosmo’s (ATOM) recent surge in price could be attributed to its influx of developers topping that of Ethereum. The other reason for the ATOM price increase might be the announcement from dYdX that it is building an independent blockchain on the Cosmos ecosystem instead of Ethereum.
Furthermore, Bitcoin price soared above $29,000, pushing the market cap of all cryptocurrencies to surpass $1 trillion. Many crypto assets, including ATOM, recorded price growth due to correlation to BTC.
Technical Analysis of ATOM price Action
Below is the technical analysis of ATOM price action on the 4-hour trading timeframe. Cosmos has broken through the short-term resistance level of $11.69 and is currently trading between $10.571 and $15.484 support and resistance levels. ATOM must break through the $15.484 primary resistance level to confirm the bullish momentum.
However, the bears are trying hard to break the $10.571 support level but couldn’t due to the high bullish momentum. If the bull’s strength is not strong enough to push ahead, the bears might take over the trend and cause a trend reversal.
ATOM’s 50-Day SMA’s change in direction caused the market’s structure to change. If the bullish momentum doesn’t pick up, the trend may change to a potential bearish market. The 50-Day SMA established a Death Cross by crossing below the 200-Day SMA, indicating a potentially bearish signal and suggesting a selling opportunity.
The Relative Strength Index (RSI) analysis indicator enables traders to determine the momentum and strength of the price movement of an asset within a period. At the time of analysis, the RSI of ATOM/USDT is at 61.74 above the neutral zone. Therefore, this shows that ADA is neither in the overbought nor oversold zone. However, the buyers are building momentum to take ADA to the overbought zone while the seller pushes it down despite weak momentum.
In conclusion, the surge in Cosmos demand may be attributed to its growing network of interconnected blockchains and its influx of developers. Additionally, Bitcoin’s price increase might have positively impacted ATOM’s price growth. The technical analysis suggests that ATOM needs to break through its primary resistance level to continue its bullish trend. Although, if the bullish momentum does not pick up, the trend may change to a potentially bearish market.