The Cosmos Network is on the brink of a pivotal evolution with the proposed merger of two leading decentralized exchanges, Osmosis [OSMO] and UX Chain [UX], potentially marking a new era for its native token, ATOM.
This integration, revealed on December 3rd, is poised to enhance the network’s functionality and appeal significantly.
Meanwhile, ATOM has been consolidating after a breakout above its significant resistance. With these new developments, is ATOM headed to new highs?
UX Chain, previously known as Umea, has rebranded itself as a prominent cross-chain DeFi hub within the Cosmos ecosystem. Its focus on lending services has positioned it as a key player in the decentralized finance sector.
Meanwhile, Osmosis stands out with its unique inter-blockchain communication protocol. It facilitates seamless interactions between major networks like Ethereum [ETH] and Polkadot [DOT] and is a vital DEX on Cosmos.
The merger initiative, spearheaded by Osmosis, is a strategic move to consolidate their dominant positions in the Cosmos ecosystem and a step towards achieving mesh security – a critical component in the evolution and fortification of blockchain networks.
The combined expertise of Osmosis and UX Chain is expected to create a more secure, robust, and resilient network, safeguard user assets, and enhance the ecosystem’s overall stability.
This collaboration could be a game-changer for ATOM’s market valuation. Both UX Chain and Osmosis tokens have demonstrated strong performance recently, with OSMO witnessing a remarkable 70% surge over 30 days.
ATOM’s market cap could see a significant uptick, propelled by the heightened activity and value locked in these protocols, should the merger materialize.
Moreover, the merger’s impact extends beyond immediate market metrics. Cosmos’ Development Activity, a crucial indicator of the network’s innovation and growth, currently indicates a period of consolidation after significant feature rollouts.
According to Santiment data , Developer Activity has diminished since December 2. The integration of Osmosis and UX Chain could invigorate this metric, signaling renewed development vigor, which, in turn, fuels bullish sentiments for ATOM’s price.
After finishing its decline at $6.20 on October 19, the price of ATOM started an upturn. We saw an increase of 70% to nearly $11 on November 12, but the momentum was stopped shortly after a breakout above the descending resistance level.
Considering the significance behind the breakout from the descending structure, we could have seen the start of a new bull phase for ATOM, but further volition is needed. October 19 low was slightly higher than June 16 last year, meaning that the descending structure could have been the first bull market correction.
If this is true, then the uptrend from October 19 should have been the move that would surpass its previous high of $17. This means that its first lower-degree uptrend ended and will now make a retracement to preferably above $7.50.
Only after that can we anticipate a larger ascending move that could be its wave 3 and make a new high of around $35.
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