Cosmos (ATOM) lost 20% in a day after hitting an all-time high; Bitcoin FUD at play?

cosmos ATOM Emeris Bitcoin
“Space – Antennae Galaxies” by Trodel is licensed under CC BY-SA 2.0

Key Takeaways:

  • After a fruitful month, ATOM scored a new all-time high but dropped 20% hours later.
  • Cosmos ecosystem poised for growth, according to the cheif executive.
  • The daily chart suggested an uptrend.

YEREVAN (CoinChapter.com) – Cosmos (ATOM), a DeFi protocol that calls itself the internet of blockchains, has had an impressive run. It rallied not only throughout August with the rest of the market, but also throughout September, when Bitcoin entered a consolidation phase and took most of the altcoin market along for the ride.

ATOM managed a 158 percent rally since Sep. 6, hit an all-time high of $44.8 in the Asian-Pacific session Monday, but slipped and fell to $34.2 by the New York session opening bell. What fuelled the rally and caused the drop?

Cosmos ecosystem; what’s new?

After Cosmos launched Emeris in mid-August, the ecosystem was on a steady rise. In hindsight, the internet of blockchains introduced Emeris, the first functioning user interface for DeFi on August 18. It is also a way to access Gravity, a decentralized exchange (DEX) that claimed to have “substantially lower fees” for swapping coins, at $0.08 on average.

Through the new interface and Gravity, all the Cosmos users can access several cross-chain DeFi protocols on the network. In addition, they can also trade digital assets across blockchains. As mentioned, since Emeris’ successful launch, the ecosystem has seen steady gains (195% since August 18).

Also read: Cosmos (ATOM) rallies 35% despite the altcoin cool-off; what’s behind the uptrend?

Fast forward to late September, Emeris has over 22,000 users and $30 million in liquidity. In an interview with Nasdaq’s Jane King, Peng Zhong, the chief executive of Cosmos, commented on the project’s success and the reasons behind it. He pointed out interoperability as one of the primary driving forces.

Cosmos ecosystem is the next generation for DeFi. It is meant to bridge all the chains together. […] Cosmos will allow you to bridge to Ethereum, and other big ecosystems today: Solana, Polkadot, Avalanche, etc.

said Mr. Zhong.

Ben Armstrong, a crypto influencer with a substantial following, also took part in the interview. He voiced his support for Cosmos and called it “the most underrated project in all of crypto”.

Despite the solid ground behind the rally, ATOM fell victim to the latest correction wave brought on by Bitcoin on Saturday. The alpha crypto lost an additional 7.5 percent in the past 24 hours, while Cosmos lost 20.

Also read: Ethereum-Solana bridge Wormhole v2 goes live as SOL and ETH fall over 10%

ATOM daily chart

In hindsight, when altcoins copy Bitcoin’s bias, their price swing has a greater amplitude. The same happened to ATOM. As mentioned, the flagship cryptocurrency lost 7.5 percent. After resisting the correction for days, Cosmos complied and dropped 20 percent, regressing to $34.2 hours after the new all-time high.

Cosmos' violent 20% drop after an all-time high. Source: ATOMUSD on TradingView.com
Cosmos’ violent 20% drop after an all-time high. Source: ATOMUSD on TradingView.com

The digital asset inched close to a significant resistance-turned-support bar at $32-33. Should the bearish trend continue, ATOM could retest the support and bounce back. When the token was still holding up well against the BTC dip, Michael Van de Poppe, the CEO of analytical consulting firm Eight, predicted a bullish continuation.

He mentioned, that “sweet baby” is on the way to claim $100. Time will tell if the prediction has merit.

Also read: Wall Street bigshots enter Bitcoin and crypto markets amid bullish BTC signs

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