The Ethereum merge has finally happened. It was finished, but fortunately it went smoothly without any major problems. As many predicted, the event turned out to be a “buy the rumor, sell the news” style event. consumer price index print The September 12 plunge was the real catalyst that pushed the market in its current direction.
Regardless of the reason for this week’s downturn, the merge is over and the bulls have nothing as a result. A new bullish narrative may need to emerge or analysts may need to keep a close watch on smart money to see which assets they rotate to.
What’s the new story now that it’s over? Surge, barge, purge or splurge? Dirty maybe?
— Galois Capital (@Galois_Capital) September 15, 2022
Remember, “mergeAccording to so many “smart” people, this is a bullish event that could push Ether prices higher, and a treasury of hard fork ETH POW tokens could bring in billions of dollars of liquidity. was intended to be magically realized. Migrate to Bitcoin and help ailing assets get out of their current range.
Well, it didn’t happen. I’m not saying it won’t happen, but the reality is that the market is painted bright red. His fall to $20,000 in Bitcoin on Sept. 15 triggered a market-wide correction, with most altcoins suffering his double-digit losses. At the moment, there is no easy-to-grasp story that investors can interpret as bullish.
Not all are dumping
There just so happens to be an outlier, named Cosmos (atom). Surprisingly, he is one of the few green assets on the Merge day chart. Currently, the altcoin is mirroring his 9.4% gain, rebounding sharply from the Sept. 14 low of $13.19.
In previous analysis, ATOM price trading inside the ascending channelabove the 20-day moving average, suggesting that the drop towards and below the moving average reflects a good buying opportunity. A simple technical analysis of ATOM’s price action is: , focus on the following points:
- ATOM price continues to make higher lows and higher highs while trading within the trendline of the ascending channel.
- ATOM price saw a brief bullish break outside the channel, tapping the 200-day moving average and returning to the channel’s midline and 20-MA to confirm support respectively.
- After testing the support, the price has resumed its uptrend and is trading at the top of the current range and may retest the 200-MA to flip the level to the support.
Let’s take a quick look at some of the factors behind ATOM’s bullish momentum.
Protocol migration, liquid staking, rising TVL, potential IBC
After Terra imploded, many protocols left Terra and were relaunched in the Cosmos Hub SDK. In September, analytics firm and protocol builder Delphi Digital also announced that it had chosen Cosmos as its primary blockchain for building new projects.
When projects are built on Cosmos Hub, ATOM often has value as DeFi protocols and other DApps participate in the network’s interchain security system that works through IBC. The Inter-Blockchain Communication protocol (IBC) is essentially the “Internet of Blockchains”, a bridge that enables cross-chain transfer of tokens and secure interoperability between different blockchains.
DApps, AMMs, and DeFi-style platforms built on blockchain typically offer staking, and the fees generated are often shared between stakers.
ATOM staking is currently offering 17.75% APY, with 66.75% of the available circulating supply staked according to Staking Rewards. Cosmos plans to launch Liquid Staking, a phenomenon that increases buying pressure on the ecosystem’s native token when deployed to other DeFi platforms on other blockchains.
The data also show a steady increase in the number of unique delegation addresses in the network.
Multiple Cosmos Ecosystem Platforms, Including COMDEX, Will Launch Their Own Stablecoins (CMSTs), and Assets Locked and Stakes Within the Platforms Can “Back” That Stablecoin’s $1 Peg There is a nature. Given the structure of Cosmos Hub and IBC, ATOM is likely to be one of the key assets used in the “casting” process.
Of course, Total Value Locked (TVL) within the Cosmos ecosystem collapsed as DeFi and the broader crypto market succumbed to bearish trends. It shows a noticeable influx over the last 7 days. Along with Atom’s price, it is a figure that attracts attention.
Additional growth metrics that raise investor eyebrows are Cosmos’ 180-day supply-side revenue, protocol revenue, and daily trading volume.
Supply-side revenue reflects the amount of transaction fees allocated to validators, while total revenue is the total transaction value paid by protocol users.
Protocol revenue, on the other hand, is the amount of transaction fees paid to the protocol, which is the owner of ATOM and may share a portion of this revenue with users and stakers of the platform.
Essentially, what we are seeing is Metcalfe’s Law at work. As the ecosystem grows, the network grows, the total value locked increases, and liquid staking provides additional utility to staked assets. It also enters a cycle of being bought, staked, issued into stablecoins or IOUs, and used within the ecosystem to drive additional growth.
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