The rally in Cosmos (ATOM) continues through Friday, helping the cryptocurrency post weekly gains of over 20% despite a recent cautious sentiment towards the overall crypto market. At the time of writing, ATOM / USD is trading at around $ 34.07.
One of the biggest drivers of bullish sentiment was the Inter-Blockchain Communication (IBC) protocol, which runs on the Cosmos blockchain – an infrastructure that enables interoperability between different blockchains via a bridge for seamless cross-chain data transfer . Since the beginning of this month, activity on the network has risen sharply, with IBC transfers (850k +) making up a large proportion of the transactions processed.
The popularity of IBC
The Cosmos Hub, launched in February of this year, was the first blockchain to implement the IBC protocol – an end-to-end connection-oriented protocol for the secure transfer of data between different types of blockchain networks. IBC can be used by developers to create many types of cross-chain applications, including token transfers, enforcement of smart contracts in multiple chains, and data sharing.
One of the most promising projects in the Cosmos ecosystem is Osmosis – an AMM that allows users to create liquidity on its platform and trade IBC-enabled tokens. Osmose’s trading volume has been rising steadily since mid-August, peaking at nearly $ 25 million by September 13, before subsiding again. The higher activity in osmosis increases the usage of the Cosmos blockchain and supports the value of ATOM.
Several analysts have also given a highly optimistic outlook on the future of Cosmos Network, including the head of the Coin Bureau, which operates under the pseudonym “Guy” and has described it as possibly the most important cryptocurrency project, and praised the IBC protocol for its interoperability functions who are responsible for the future of the industry. He expects the value of the ATOM token to rise to at least $ 100 in the coming weeks, supported by strong fundamentals.
Important levels to watch
If we look at the ATOM / USD H4 price chart, we find a bearish bias in the moving averages of the smaller timeframe as well as in the leading technical indicators MACD and momentum. However, the larger MAs also indicate growing interest from buyers.
Cosmos’ ATOM token is currently trading above the pivot point at $ 29.16, but spike in selling pressure may drive it down to test that level. However, with more buyers entering the market soon, we can see the price rise higher instead to test the resistance at $ 40.97.