Cosmos (ATOM) Next on the List for Breakouts
Cosmos (ATOM) is the next platform-based asset to burst during the latest series of altcoin rallies. ATOM is once again close to its yearly high, with expectations of moving into price discovery range.
On Friday, ATOM prices expanded by a net 19%, while trading in the $27-$29 range. ATOM extended the rally from the last few days, on trading activity above $2.4B in the past 24 hours. The price spike coincided with positive developments for Solana (SOL), sparking price action in similar asset types.
Cosmos, like Elrond (EGLD), was among the most successful token sales through the Binance Launchpad program, which performed high-valued IEOs in 2019.
Cosmos Promises Internet of Blockchains
The Cosmos project aims to create a hub of blockchains, connecting different asset types. The Cosmos project thus claims to hold in more than $107B in value through its connected activity.
The actual value of Cosmos may fully develop in the future, as more chains show readiness to connect via Cosmos hubs. In this regard, Cosmos implements a model similar to Polkadot (DOT), Polygon (MATIC) and even Binance Smart Chain, according to recent analysis by Messari. However, the Cosmos ecosystem is yet to gain attention and similar usage.
Key Projects Drive Cosmos Forward
The key projects that bring value and lock it within the Cosmos hubs are Terra (LUNA), as well as ThorChain (RUNE).
For now, those two blockchains are considering extending their bridges through the Cosmos technology, but are utilizing their proprietary solutions for linking Ethereum with other networks.
At this point, those chains lock in value for decentralized trading pairs and for lending liquidity. However, it has been impossible to estimate how those chains will connect within the Cosmos hub, or if there will be demand for ATOM assets to be moved across chains. The success of Cosmos will hinge on projects choosing to use the hubs and creating more traffic on the Cosmos network. For now, Osmosis is one of the few projects that uses Cosmos directly, though traffic is still relatively small.
The DeFi space continues to evolve and add new projects to lock in assets as collateral. While Ethereum and BSC remain leaders, smaller chains are already accruing value above $1B. The trend is much more active for Solana (SOL), which locks in upward of $9B in value.
Can ATOM Break Out to Higher Levels
The last few days demonstrated that some assets are still capable of producing high returns, despite the unexpected flash crash in the middle of the week.
Extreme predictions see ATOM rising with a trajectory similar to Algorand (ALGO), to get closer to the $100 range. In the short term, scenarios suggest ATOM may first try for the $32 range.
The recent price move followed expectations of a breakout since the beginning of September. The most recent spike, however, does not exclude retreats, as ATOM slid toward $25.
The value of platform coins is not entirely decoupled from Ethereum, where there is still the highest level of economic activity.
Is ATOM Trading Profile Reliable
ATOM has the advantage of more distributed trading, with a smaller fraction of trading on Binance International exchange. The asset is open to US investors through the Coinbase brokerage and offers several fiat pairs on the Kraken exchange.
ATOM has a relatively diverse set of trading pairs, with about 66% of trading depending on Tether (USDT), while smaller volumes flow through BTC, US dollar and Korean won pairs.
Is ATOM Staking Profitable
The value of ATOM also hinges on the eventual use of Cosmos hubs to move assets and connect blockchains. One of the potential solutions is a proposition to encourage the usage of Cosmos Hub, thus bringing back value to ATOM users.
ATOM can also be staked for annualized returns above 9%. Staked ATOM supports validators, but comes with a warning. Validator failures may lead to losing some of the ATOM staked, hence wallet holders are advised to spread out their ATOM to several validators.
Will Cosmos Catch the NFT Boom
Cosmos already hosts 15 small-scale crypto collectible marketplaces, competing with other platforms that have allowed the generation of collectible items.
The presence of NFT markets further raises the value of ATOM, as holders may start receiving airdrops or be eligible to claim new collections.
Ethereum remains the most in-demand network for tokens. However, increased activity has bumped against scalability restrictions. A recent minting event created a new case of network congestion, making fees too high for most users.
Alternative networks create demand for cheaper and more accessible airdrops, with Solana once again in the lead.
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