ATOM, the native sign of the interoperable blockchain cosmos, has been on a roller coaster ride for the past 24 hours.
The 17th largest cryptocurrency by market capitalization rose nearly 35 percent over the period, hitting a record high of $ 8.67. The ATOM / USD exchange rate became more influential in the increasing appetite of traders for decentralized financial unicorns.
Cosmos has already put together a number of successful DeFi projects, including Band Protocol, Kava, Terra and THORChain. They reflect in many ways the services of DeFi protocols supported by Ethereum. They also spawn critical modules that aim to build a functioning decentralized financial ecosystem.
The Cosmos chart on TradingView.com shows that ATOM / USD has hit its all time high
However, the recent ATOM price rally had less to do with Cosmos’ potential as a blockchain project. Instead, it more closely followed the hype that has lingered in the DeFi sector for the past three months. So it appears that there has not been a market moving event in the past 48 hours that could have shot the ATOM price up.
The token was thus under the influence of speculators, especially when other large tokens, including Bitcoin, reported significant intraday losses on Sunday. So it seems that influential traders decided to hedge in ATOM, which caused the short-term uptrend.
Correction is in progress
ATOM / USD corrected more than 8 percent in Monday’s trading session.
As of 1114 UTC, the pair was trading at nearly $ 7.79, showing that traders were taking advantage of the ATOM’s spikes for profit-taking. At the same time, the Bitcoin price rose 2.39 percent to over $ 11,800. This again reflected the propensity of traders to sell one asset at their local top to buy another at their session low.
ATOM / USD price targets. Source: TradingView.com
The must of ATOM’s upward bias now depends on the willingness of dealers to buy at the local highs. The token’s Fibonacci retracement chart shows that the price could next test $ 10.56 as the next resistance level. Meanwhile, it is expected to hover above its new-found support level at $ 7.13 to maintain its short-term bullish bias.
A break below the stated lower price limit would expose LINK to further lower levels. They’re at $ 5.94, $ 5.01, and $ 4.36.
Cosmos-led DeFi boom
Kosmos is more likely to get attention due to Ethereum’s booming DeFi space. Despite similarities, projects listed on the Cosmos network have lower market caps than projects listed under Ethereum. Therefore, traders may find the tokens of these projects to be undervalued.
“However, some of them have started to lift the markets, suggesting that the DeFi craze is gradually spreading to other networks,” a Messari report said. “Because of these current valuation differences, it is worth investigating the relative value of the Cosmos ecosystem to that of Ethereum.”
This could allow ATOM to continue its bull run towards USD 10 even with minor downside issues. However, should Bitcoin explode with a huge volume above $ 12,000, the highest cryptocurrency could put pressure on overbought DeFi tokens.
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