Cosmos (ATOM) demand has risen these past few days, resulting in a significant performance. According to CoinMarketCap data 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.
Reason Behind The Surge In Cosmos?
Cosmos is a constantly growing network of interconnected blockchains created with developer-friendly application components.
Inter-Blockchain Communication (IBC) protocol is the technology that connects these apps. The SDK platform Cosmos offers allows programmers to produce top-notch decentralized apps (dApps).
Other developers have also constructed applications on top of it, such as MM Finance and VVS Finance. Cosmo’s (ATOM) recent price surge 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.
Also, 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.
ATOM Price Action
Below is the technical analysis of ATOM price action on the 4-hour trading timeframe. And also the possible resistance and support zones.
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.
What Do The Technical Aspects Suggest?
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.
Featured image from Forkast News and Chart: TradingView