Cosmos (ATOM) has the potential to see big gains in the weeks to come, largely as its longer-term chart shows a bullish continuation pattern.
Synchronized “Bull flagThe structure appears when the asset is trending downward while jumping between two downward sloping trendlines. However, it eventually breaks out of range in the direction of its previous trend, with a profit target equal to the size of its previous uptrend, also known as Flagpole is known.
ATOM / USD weekly price chart with bull flag setup. Source: TradingView
Therefore, if ATOM is to break above the flag’s top trend line (with an increase in trade volume) in a “perfect” world, it can rise $ 35 to the height of the flagpole. This sets a price target near $ 65 as measured from the current potential breakout point.
Almost 64% of the total supply from ATOM is staked
The bullish setup in ATOM appeared as the token rose over 330% from its June low at $ 7.82 through close to $ 32 this week.
The scarcity of tokens in circulation could play a role in driving buyers into the market. Data retrieved from Messari showed that almost 64% of the current ATOM supply is staked out.
ATOM staking data. Source: Messari
According to data, Cosmos investors have over 180 million ATOM tokens staked to become validators on his ‘Cosmos Hub’, a proof-of-stake blockchain that is one of many hubs in the network. In return, users receive a portion of the network transaction fees and block rewards.
Pentoshi, an Independent Market Analyst, noticed that the increasing number of ATOM tokens used has contributed significantly to driving up the price.
The pseudonymous Twitterati added that ATOM sellers were losing momentum, citing two fourth-quarter corrections that were halted midway due to increased buying pressure near the token’s previous all-time high.
ATOM / USD daily price chart by Pentoshi. Source: TradingView
According to the analyst, ATOM clearly sees:
“Signs of absorption”
Avalanche fractal underlines the potential of ATOM
Another analyst, known by the pseudonym “Bluntz”, expected that ATOM would continue its upward rally based on similar gains posted by one of its biggest blockchain rivals, Avalanche (AVAX) earlier this year.
Like Pentoshi, Bluntz sees ATOM’s chance to hit its previous record high again as a basis to continue his bull run. In a similar setup, AVAX grew by almost 250% after finding solid foundation within the $ 50 to $ 60 support area.
ATOM / USD vs AVAX / USD daily price chart from Bluntz. Source: TradingView
According to Bluntz, ATOM could easily reach $ 100 in the medium term.
The views and opinions expressed are those of the author only and do not necessarily reflect the views of Cointelegraph.com. Every step of investing and trading involves risk, so you should do your own research when making a decision.