Cosmos [ATOM] rallies 11%, but $3 remains a sore point – Here’s why

Key Takeaways

Why is ATOM’s price up today?

ATOM price rose from positive spot netflows, big whale orders, and chain activity.

Why is $3 important for ATOM?

The level defines the sustainability of the breakout, since a dip below it would invalidate the move.

ATOM was among the biggest losers in the last month since the crash that almost took the altcoin to zero. In the past 24 hours, Cosmos rose by more than 11%, reclaiming the $3 mark.

Examining ATOM’s price breakout 

Cosmos [ATOM] has been declining since the 10th of October, with the altcoin coiling inside a descending trend channel.

The altcoin broke above the channel, with the Bull Bear Power (BBP) showing that buyers were the stronger side. Similar readings on the 4th of November led to price pushing from $2.41 to around $3.20.

In the past week, ATOM has been trading on the upper side of the channel. Because of this, bulls were protecting themselves from a price decline to the channel’s lower side.

Source: TradingView

However, ATOM needs to stay above the $3 zone to sustain the breakout over the channel. Such patterns signal looming price reversals when formed at market bottoms.

Meanwhile, failing to hold above $3 would invalidate the breach of the upper resistance. That way, ATOM would be back to its downtrend.

What’s driving ATOM’s price?

Whales and spot orders were the main factors driving the price of ATOM up in the past 24 hours.

According to CryptoQuant data, whales returned to ATOM accumulation after staying neutral since the 10th of October. However, the positions were not as big as when ATOM traded above $5.

Source: CryptoQuant

Buyers dominated the Spot Taker CVD for the last three months, according to CryptoQuant data. In fact, the spot inflows exceeded outflows, with the net flow at $769.54K when writing.

Source: CoinGlass

This data showed that capital was flowing into the altcoin; that’s why the price was surging. Apart from buyer activity, on-chain activity also had a hand in this charge.

On-chain data showed that Cosmos Hub had hit a total of 85.85 million transactions with 200 validators. Furthermore, total addresses were at 3.494 million, as assets on the blockchain surpassed 93K.

Source: Cosmos Hub Explorer

However, the activity data still showed weakness when compared to other blockchains, as seen on Token Terminal. Layer 1 (L1) blockchains had 18.6 million, with Cosmos Hub having only a share of 6.9K.

Notably, the most significant sellers were at $4, where the flash crash was initiated. Cosmos needed to flip this zone in order to sustain the current uptrend beyond the $3 zone.

Otherwise, the altcoin would remain in its bearish structure until the entire market shifts.