Cosmos (ATOM) Rallies as It Breaks Out from Falling Wedge Platform Targeting $7-8

With the latest rebound in crypto prices, Cosmos (ATOM) was one of the tokens that posted significant gains. Today's rebound helped it recover from last week's losses

The latest crypto price rebound saw Cosmos (ATOM) token post some of the most significant gains. Today’s rally helped the token recover from last week’s losses, largely driven by growing confidence in crypto markets. However, the project still faces some issues that may weigh on it in the future.

Cosmos is currently experiencing a notable breakout which could propel its momentum further in the near future. On Friday, March 14, ATOM was at $4.30, registering a 9.67% rally in one day. This rally also erased its weekly declines, recovering from a multi-year low of $3.42, the lowest level since 2020.

The recovery also helped ATOM break a key resistance the same day. The token’s price broke through a falling wedge platform that formed since December high of $10.42, this signalled the potential for a realignment between its current price and recent highs, around $7-8.

$ATOMTesting Crucial Resistance of Falling Wedge in Daily Chart Breakout can send #Atom between 7-8$ in Midterm 📈 pic.twitter.com/ELmqgHsaJH

Will Cosmos Rally Continue?

The recent rally came after several notable developments for the project. For one, Cosmos recently held its IBC Eureka Townhall, showcasing its ecosystem. The network also reached a high in developer activity, with 7k weekly commits, ranking third after Ethereum and Skale.

Furthermore, Cosmos is also getting a lot of attention from Coinbase (NASDAQ:COIN) users, with Custody at all-time high levels. Tokens held at the exchange reached 32 million, a figure which showcases strong ties between the two ecosystems.

Hey @brian_armstrong, what's going on with Coinbase and $ATOM?

Coinbase clients are cosmos maxis or what? pic.twitter.com/TNzgxpPzwt

One potential reason for this metric is the large yield that Coinbase currently offers ATOM holders. Namely, users that stake the token with Coinbase can get up to 14.97% in APY yield if they stake the token for one year.

Still, this metric also prompted concerns about the potential for increasing centralization of the network. The large custody share leads to centralization in voting power, which could see major validators exert too much control.

In addition, centralization impacts network stability, which already came into question near the end of last year. For instance, in October, reports revealed that a suspected North Korean hacker worked as a developer on the project. Coupes with the recent security concerns, network stability remains a serious risk for the network.

To learn more about crypto trends, read: Five Crypto Airdrops To Keep Your Radar On