ATOM is very close to ATH after hitting a three month high
ATOM is very close to ATH after hitting a three month high.
Bitcoin’s proximity to the $ 40,600 mark on January 7th after a downtrend that has lasted since December 28th has pushed total crypto market capitalization below the $ 2 trillion mark.
While Bitcoin is hovering at $ 41,782 at press time and the larger market looks relatively weak, Cosmos (ATOM), ranked 24th altcoin, hit a 90-day high very close to ATH, which is a puzzling move .
Where will ATOM go?
Generally, when a coin forms a new ATH with indicators flashing bullish, it enters a pricing zone. However, with Bitcoin down 11% in the past four days, the broader market appears to be struggling hard.
On the other hand, sees an explosive opportunity as much of the market consolidates. The ATOM price rose over 45% in the first week of January, but Bitcoin’s decline to $ 40,000 appears to be affecting its performance as well.
The $ 44 area has acted as long term resistance for the ATOM, especially as it is on the way to form a new ATH. This time, too, after hitting a three-month high of $ 44.71, immediately pulled back, little different from the ATH of $ 44.81 last September.
Source: trade view
At press time, ATOM was trading at $ 37.37, down 3.79% over 24 hours and up 3.48% for the week, impacted by the larger market.
The ATOM rally trigger?
The burgeoning ecosystem of Cosmos along with newly introduced Ethereum cross-chain bridges and the upcoming Theta upgrade have served as a potential catalyst for the recent over 75% surge from ATOM. It also establishes bridging protocols that connect Cosmos to other EVM-compatible networks, and as the number of chains connected to Cosmos increases, the overall value of the ecosystem can increase.
In addition, the implementation of Evmos, an EVM compatible protocol, will enable the migration of assets and projects operating on the Ethereum network to the Cosmos ecosystem, which was set up to support the growth of the ecosystem and TVL . That is, it was until the end of last year expand An ecosystem of 28 active, interconnected chains totaling over $ 68 billion has supported the upward momentum.
So what’s next for ATOM as the price recovery fades and the evolution of the ecosystem is still unclear?
While the price decline affected trading volume and social volume, it did not affect the Sharpe ratio (which indicates the expected profit). Surprisingly, ATOM’s volatility has stayed lower while the Sharpe ratio stays in a larger downtrend, making the price relatively safe.
While the ATOM is still proving to be a good investment with an annual ROI of 525.6% and a higher Sharpe ratio, it should be noted that the declining rally at $ 44 is again a signal of danger. With the broader market and Bitcoin looking weak, the chances of another short-term ATOM rally don’t look high either. However, if ATOM holds up above $ 40, a new ATh will be coming soon.
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