On May 20, Cosmos (ATOM) proved to be the largest gainer among all major cryptocurrencies. Despite the investors fearing that the damage may expand, the investors have trusted Cosmos. Their strong determination has helped them brush off any fears that would’ve proven extremely dangerous if not shaken off.
Among all the fears, it is the Terra (LUNA) issue that has resulted in doing so much harm to the entire cryptocurrency sector. People have lost their trust in cryptocurrencies and are very hesitant when thinking about investments. The scale of fear went up as the valuation of Terra went down tremendously. It lost too much in its value as a 99% drop was recorded on May 12.
ATOM’s 10% Growth
The value of ATOM surged more than 10% during the day on May 20. The May 20 growth added a higher contribution to the growth rate of ATOM. It had been growing in value since the May 12 crash.
On May 12, ATOM’s trading price had dived down to $8. However, the price of ATOM started experiencing a retracement that continued to gain momentum from May 12 to May 20. It continued growing broader and by now, it has rebounded at a significant rate. The examination shows the overall retracement ATOM has witnessed in an entire week is 45%.
ATOM’s Parent Chain Felt the May 12 Impact
Although ATOM was lucky enough to withstand the pressure coming from the market due to the Terra disaster, its parent chain was not so lucky. Cosmos Hub, the parent chain of ATOM faced a huge impact and a huge outflow. It recorded users liquidating their holdings from the liquidity pools.
Prior to the crash, the TVL for Cosmos Hub was worth more than $10 million. Following the crash, the liquidation paced up and by May 20, it was down to $155,000.
Surprisingly, 92% of the total liquidity pools at Cosmos Hub comprised of Terra, which resulted in a huge liquidation. As recorded on May 9, Terra was the dominant asset in the liquidity pools. Following the dip, Terra’s dominance in the Cosmos ecosystem has been reduced to 17% only.
Alongside the Terra crash, came the Federal Reserve matter increase a surge in the interest rates. With increased interest rates, people had no choice but to withdraw funds from their investments and holdings. This also caused huge damage to ATOM, ETH, and BTC.
ATOM’s Bearish and Bullish Sentiments
The data predicts that in the running quarter, ATOM may continue facing dips. Adding the recent negative factors, it can be predicted that ATOM’s price may move down to $7.50.
If the recent negative factors go away and ATOM gains momentum, its value may then go up to $17.25.