Cosmos [ATOM] Experiences 11% Surge, Yet Struggles with $3 Resistance – Here’s Why

ATOM’s price increased due to positive spot netflows, substantial whale orders, and active chain activity.
The $3 level is crucial for maintaining the price breakout; dipping below this could reverse gains.
ATOM was among the largest losers last month, but has now recovered above $3 after a significant crash.

Key Takeaways

ATOM’s price increased due to positive spot netflows, substantial whale orders, and active chain activity.
The $3 level is crucial for maintaining the price breakout; dipping below this could reverse gains.
ATOM was among the largest losers last month, but has now recovered above $3 after a significant crash.

Cosmos [ATOM] Experiencing 11% Surge, Yet Struggles with $3 Resistance - Here’s Why

Understanding ATOM’s Price Movement

Cosmos (ATOM) has been on a downward trend since October 10, trapped in a descending trend channel. Recently, the altcoin managed to break above this channel, showing that buyers were in control, as indicated by the Bull Bear Power (BBP). A similar situation occurred on November 4, when ATOM’s price surged from $2.41 to approximately $3.20.

In the past week, ATOM has hovered at the upper end of the channel, indicating that bulls are working to prevent a further price drop to the channel’s lower boundary.

ATOM Price Chart Source: TradingView

However, for the breakout to remain intact, ATOM must keep its price above the $3 mark. If it falls below this level, the breakout would be considered invalidated, leading the altcoin back into a downtrend.

Factors Influencing ATOM’s Price Rise

In the last 24 hours, the uptick in ATOM's price has been primarily driven by whales and spot buy orders. According to data from CryptoQuant, whale investors resumed accumulating ATOM after remaining neutral since October 10, but their investment sizes were smaller compared to when prices were above $5.

ATOM Whale Orders Source: CryptoQuant

For the past three months, buyers have been prominent in the Spot Taker Cumulative Volume Delta (CVD), with net inflows surpassing outflows. Currently, the net flow stands at $769.54K.

Cosmos Spot Inflows Source: CoinGlass

This influx of capital has contributed to the rising price of ATOM. In addition to buyer activity, the on-chain metrics have also played a significant role in this upward momentum. On-chain data reveals that the Cosmos Hub has processed 85.85 million transactions with 200 validators, and the total number of addresses has reached 3.494 million, with assets on the blockchain exceeding 93K.

Source: Cosmos Hub Explorer

However, when compared to other blockchains, the activity level still lags behind; for instance, Layer 1 blockchains have recorded 18.6 million transactions, with Cosmos Hub contributing merely 6.9K of that total.

A critical point of resistance was seen at the $4 mark during a prior flash crash. For ATOM to maintain its current upward trajectory beyond the $3 threshold, it’s vital to overcome this resistance. Without this breakthrough, the altcoin may continue to operate within its bearish trend until the broader market changes direction.