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Cosmos (ATOM) has gained over 30% from the recent local low. The alternative token stretched its downward move amid the crypto market slump last week and seemed ready for healthy recoveries in the coming sessions.
While writing this content, ATOM traded near $11.79, with a slight 1.11% gain within the past day. Nevertheless, the crypto hovered nearly 31% from the May 12 low at $8.55. The downside had ATOM exploring the lows seen in August last year. Moreover, it reflects an 80% drop from the $44.56 all-time high.
The massive discount makes Cosmos a lucrative buy at the current lower range attained last week. The attractive narrative emerges as ATOM witnessed impressive accumulation within the past couple of days. Assessing the price charts shows ATOM’s recent reversals happened at a massive support barrier.
Besides the support retest, the dip took ATOM well into the Relative Strength Index’s oversold region. The Money Flow Index confirms impressive accumulation contributed to the reversal. Also, Cosmos bears have lost strength since the token entered the oversold area. Therefore, opening the road for recoveries.
Can Interchain Security Developments Trigger Rally in ATOM
Meanwhile, Cosmos’ rally hasn’t been as intense as expected, considering the dip’s magnitude. That can be due to the uncertainty that prices might drop further. The ATOM blockchain approached interchain security. The recent announcement about the launch came before the Terra UST crisis, which triggered crashes in the overall marketplace.
The interchain security might ensure more investor confidence, possibly bolstering the token’s recovery. Santiment confirms an increase in Cosmos developer activity index a day following the interchain security update.
ATOM’s whale supply also noted a brief surge over the previous day. That might signal improved investor confidence. Also, Binance derivatives’ funding rate recovery reinforces the narrative, suggesting investor interest resurgence.
Final Thought
Cosmos’ upticks the past couple of days might signal potential steady surges in the coming few weeks. Nevertheless, that doesn’t guarantee market recovery. Investors need to tread with care as possible bear trap plus downside risks remain.
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