ATOM: Cosmos Price Prediction After the dYdX Embrace
- The Cosmos price has staged a strong rebound recently.
- It has risen by more than 40% from its lowest level during the weekend.
- dYdX will build on Cosmos ecosystem.
Cosmos price has not been left behind in the ongoing cryptocurrency rebound. ATOM is trading at $7.66, which is the highest it has been since June 12th. It has risen by almost 40% from its lowest level this month.
Cosmos ecosystem growth
Cosmos is one of the biggest and most important platforms in the blockchain industry. It uses the Inter-Blockchain Communication (IBC) protocol to ensure that various cryptocurrencies can communicate with one another.
Cosmos also developed a product known as SDK that has been used to build many projects. The most notable project in its ecosystem was Terra, the platform that crashed in May this year. Some of the other important projects built using Cosmos SDK are ThorChain and Osmosis.
Learn more about how to buy Cosmos.
While Cosmos has suffered by the crisis in Terra, the ecosystem is seeing some growth. The most notable announcement is that dYdX, a crypto derivatives project is now building its own layer 1 blockchain on Cosmos. The project will go live later this year. In a note, dYdX said:
"One application of this is that traders would not pay gas fees to trade, but rather pay fees based on trades executed similar to dYdX V3 and centralized exchanges. These fees would accrue to validators and their stakers.”
Other important decentralized projects have also moved to Cosmos. For example, two weeks ago, it was announced that Maker’s decentralized stablecoin Dai was moving to the network. The goal is to ensure that the robust Cosmos ecosystem has its own stablecoin. Wormhole Bridge also recently expanded to the network.
ATOM price prediction
The four-hour chart shows that the Cosmos price has made a spectacular recovery in the past few days. It has already risen above the 25-day and 50-day moving averages and is approaching the important resistance level at $7.81. It has formed an inverted head and shoulders pattern.
The Relative Strength Index (RSI) is approaching the overbought level of 70 while the MACD has moved slightly above the neutral point.
Therefore, while the long-term trend for Cosmos is bearish, there is a likelihood that the coin will keep rising in the near term. If this happens, the next key resistance level to watch will be at $8.4. The bullish view will become invalid if the pair moves below the support at $7.