The latest blockchain craze is Cosmos! Atom, Osmosis, Tia – these corners are the talk of the town, thanks to their staking proposals giving access to numerous airdrops, including $DYM, which was released today! But what is its native coin, ATOM, worth?
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Introduction to Cosmos, where ATOM brings exchanges to life
Cosmos is a blockchain ecosystem designed to solve interoperability problems between different blockchains. Launching in 2019, Cosmos aims to enable blockchains to communicate and transfer assets between each other seamlessly. The idea is to create an “Internet of blockchains”, where different chains can interact and share data securely.
The native token of the Cosmos ecosystem is ATOM. ATOM is used to secure the network through a consensus mechanism called Tendermint, which is a fault-tolerant consensus algorithm. ATOM holders can participate in the validation process by staking their tokens, thus contributing to the security and stability of the Cosmos network. Thanks to their stored tokens, they also have a right to decide on the directions of the blockchain, such as the reduction in inflation from 20% to 10% a few weeks ago. By the way, you too can get involved in the governance, notably by voting in proportion to the tokens you have staked.
One of the main components of Cosmos is the “Hub” (or Cosmos Hub), which serves as a central point for communication between different blockchains. Individual blockchains, called “Zones”, can connect to the Hub to exchange information and assets with other blockchains in the Cosmos network. The interoperability offered by Cosmos enables developers to build decentralized applications (dApps) and smart contracts that can run on different blockchains. This aims to solve the problem of fragmentation in the blockchain ecosystem, where each blockchain generally operates in isolation.
Make way for tokenomics, on February 6, 2024 according to CoinMarketCap :
- Number of Tokens in circulation : 385,603,388
- Quantity in staking : 65 %
- Token inflation : 10%
Incentivizing staking is one way of encouraging ATOM token holders not to sell. Indeed, this is a token with unlimited supply and high inflation, even if it has already been halved. So, for any holder of these coins, it’s important to keep on staking them, not only to participate in the network, but above all to avoid inflation. What’s more, this ecosystem is rich in airdrop, so it attracts new users and motivates existing holders to continue staking. On the other hand, the losers will be those who don’t, suffering inflation and no reward.
Where do we stand with the ATOM token in February 2024?
The bearmarkets are not the same for all the assets in the ecosystem. In fact, ATOM’s bearmarket looks much longer, with a new hike not forthcoming.
However, support seems to be holding and being redeemed, which bodes very well for the corner’s future. We are well and truly in the long-term reload zone, which is ideal for long-term investors. However, we still need to break free of the white resistance line, which is pressing down and squeezing the price on its support. This could spell trouble for the asset if buyers of the support run out of liquidity, as Bitcoin did in November 2018.
What to expect next? What about ATOM staking?
The Cosmos ecosystem has proved its worth, and many new blockchains are coming on board, bringing a wave of airdrops to holders of various corners including ATOM. This is a real advantage, because even if ATOM hasn’t performed particularly well over the past year, a catch-up effect is finally taking place for wise managers who have been staking it for a long time.
ATOM will certainly be one of the assets in the top 20 of the next bullmarket due to its importance. However, we mustn’t forget that it is now diluted by 10% (versus 20% before), and that this dilution is only countered by buying. With this in mind, ATOM may well follow Bitcoin in terms of multiplier at the next bullmarket. If we base ourselves on Bitcoin’s multiplier being x7 from $20,000 upwards, then Cosmos should do at least the same, despite its dilution, from its support. At $6, the selling price is around $42, very close to its ATH of $44.8.
We’ll still have to watch out for the red selling zone, known as the sellers’ reload zone, which should kick in if the price returns to this area. The best way for long-term investors is still to use the reverse DCA, i.e. to sell in stages when ATOM rises, if at all.
Cosmos is a must-have ecosystem, not only because of its technology, but also because of its airdrop craze. Much higher targets can also be set, particularly close to $100. However, you have to think as an investor, and the risk of exiting an asset in 1 go at very high targets is very high.
If you wish to invest in this asset, do so in good conditions (close to support) and, above all, set up a sales strategy that suits you. Aiming for the moon with assets in the top 30 is not necessarily advisable, as they already have very high market caps. And don’t forget ATOM staking to be eligible for potential airdrops, as well as TIA and DYM.
That was Cryptnaab for you! See you next week for a new technical analysis! Have a great week!
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