One week has passed since ATOM broke through its support line, in favor of more downside. It has since then dipped by roughly 13% from the $13 price level to its new bottom range at $20.
ATOM achieved its current 2022 low on Tuesday and it happens to be the cryptocurrency’s lowest price since September 2021. Even more interesting is that ATOM managed to extend its dip to almost 40% from its 4-week high of $33.29 which it achieved on 3 April.
ATOM’s RSI briefly entered the oversold zone during Tuesday’s trading session as the price dipped further down. Strong outflows as shown by the MFI reflect the bearish price action in the last 4 weeks but the indicator is now showing signs of accumulation near its bottom range. The DMI reflects the strong bearish trend but its –DI line’s inversion suggests that the bears might be losing their momentum.
On-chain metrics are in favor of the bulls
ATOM’s Binance derivatives funding rate has demonstrated healthy recovery to the 0.01% rate especially as the price reaches its lower range. This can be interpreted as a sign of increased interest by derivatives traders especially with the expectations of a bullish reversal. This suggests that they are placing their bets in preparation for a bullish recovery.
ATOM’s developer activity metric on Santiment registered a significant uptick in the last 7 days. It is currently at its highest point while the price is in its lower range.
The developer activity aligns with a recent announcement about Inter-Blockchain Communication Protocol: IBC-Go. The announcement revealed that Composable Finance received a grant from Interchain Foundation (ICF) to develop IBC-Go.
The grant will facilitate the creation of a client that will enable communication between the Centauri bridge and the Cosmos network. The announcement underscores a positive development for Cosmos and this may contribute to ATOM’s potential value over time. Meanwhile, ATOM’s value in the short may receive a boost from accumulation at its currently lower prices.