Cosmos (ATOM) has the potential to record major gains in the upcoming weeks primarily because its longer-timeframe chart is showing a bullish continuation pattern.
Dubbed “bull flag,” the structure appears as the asset trends lower while bouncing between two downward sloping trendlines. However, it eventually breaks out of the range, in the direction of its previous trend, with a profit target at length equal to the size of its previous uptrend which is also known as the flagpole.
ATOM/USD weekly price chart featuring Bull Flag setup. Source: TradingView
Therefore, in a “perfect” world, if ATOM is to break above the flag’s upper trendline (with a rise in trading volume), it may rise by as much as the flagpole’s height around $35. This sets a price target near $65 as when measured from the current potential breakout point.
Nearly 64% of ATOM’s total supply is staked
The bullish setup in ATOM appeared as the token rose over 330% from its June low at $7.82 to this weeks swing high near near $32.
Circulating token scarcity could be playing a role in driving buyers into the market. Data fetched by Messari showed that nearly 64% of the current ATOM supply is staked.
ATOM staking data. Source: Messari
According to data, Cosmos investors have staked over 180 million ATOM tokens to become validators on its ‘Cosmos Hub,’ a proof-of-stake blockchain that constitutes one of many hubs on the network. In return, users receive a portion of the network transaction fees and block rewards.
Pentoshi, an independent market analyst, noted that the rising number of staked ATOM tokens have been instrumental in pushing its price upward.
The pseudonymous Twitterati added that ATOM sellers have been losing momentum, citing two corrections during the fourth quarter that got stopped midway due to a higher buying pressure near the token’s previous all-time high levels.
ATOM/USD daily price chart by Pentoshi. Source: TradingView
According to the analyst, ATOM is seeing clear:
“Signs of absorption”
Related: Price analysis 12/1: BTC, ETH, BNB, SOL, ADA, XRP, DOT, DOGE, AVAX, SHIB
Avalanche fractal highlights ATOM’s potential
Another analyst, known by the pseudonym ‘Bluntz,’ anticipated that ATOM would continue its rally upward based on similar gains posted by one of its top blockchain rivals, Avalanche (AVAX), earlier this year.
Like Pentoshi, Bluntz views ATOM’s chance of revisiting its previous record-high as a base to continue its bull run. In a similar setup, AVAX rallied by nearly 250% after finding a solid footing inside the $50 to $60 support area.
ATOM/USD vs AVAX/USD daily price chart by Bluntz. Source: TradingView
According to Bluntz, ATOM could easily hit $100 in the medium-term.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.
Go to Source
Author: Yashu Gola