As ATOM sees red, can Cosmos Hub help falling prices
- New updates on Cosmos Hub may add liquidity to the protocol.
- Overall activity on the network declined, and ATOM was bearish.
Cosmos Hub has been having difficulty competing with other layer 1 protocols in various sectors for quite some time. However, with upcoming developments, the protocol could have a fighting chance.
Read Cosmos’ [ATOM] Price Prediction 2023-24
A liquidity injection in the works?
One of the recent developments on the network was the introduction of Noble, which will alleviate liquidity issues by issuing its native USD Coin [USDC]. This can help address the problem of insufficient liquidity within the ecosystem, making it easier for users to access and trade assets.
The introduction of @noble_xyz is set to alleviate liquidity issues in the Cosmos ecosystem by issuing native USDC, mitigating bridge risks and fragmentation
— Nansen Research (@nansen_research) May 19, 2023
The integration of Noble can effectively mitigate the risks and challenges entailed in asset transfers across diverse bridges or networks. Additionally, it has the potential to alleviate fragmentation and discord within the ecosystem arising from the presence of incompatible protocols or systems.
Notwithstanding these advancements, the current state of the Cosmos Hub is comparatively less favorable compared to other protocols.
Regarding daily active addresses, the Cosmos Hub fell significantly behind its competitors, registering merely 23,670 daily active addresses on the protocol as of writing. Due to these factors, the daily transactions on the Cosmos Hub network also fell.
Low activity on the protocol resulted in a decline in Cosmos Hub’s revenue. According to Token Terminal, the revenue generated by Cosmos Hub fell by 8.4% over the last month.
Impact on ATOM holders
The native token of the Cosmos Hub, ATOM, has also been experiencing a state of decline in its price. After testing the resistance level of $11.942 on 3o April, ATOM’s price fell by 11.89%. At press time, the price of ATOM was $10.953.
Realistic or not, here’s ATOM’s market cap in BTC’s terms
The RSI was at 41.58, suggesting that ATOM was in a somewhat neutral or slightly bearish territory at the time of writing. While not extremely oversold, this indicated a moderate level of downward pressure on ATOM’s price.
If a price reversal were to occur in the future, it is likely that the point of control (red) at $10.953 would act as a resistance to the price. The point of control line indicates where ATOM observed the most amount of trading volume.