According to some traders, ATOM could follow AVAX’s lead and rally to $ 100

Cosmos (ATOM) has the potential to record substantial gains in the coming weeks, mainly because its longer-term chart shows a bullish continuation pattern.

Known as the “bull flag,” the structure appears as the asset tends to fall by bouncing between two descending trend lines. However, eventually the range is broken in the direction of the previous trend, with a profit target at a distance equal to the size of the previous rise, also known as flagpole.

ATOM / USD weekly chart with bull flag. Source: TradingView

Therefore, in an “ideal world,” if ATOM were to break out of the upper limit of the range (accompanied by an increase in volume) it could track a rise equal to the height of the flagpole, about $ 35. This places the target at around 65. measuring from the current potential breakout point.

Almost 64% of ATOM’s total supply is staking

The bullish setup in ATOM emerges after a 330% rally from its June low $ 7.82 to this week’s local high near $ 32.

The scarcity of tokens in circulation could be one of the factors driving buyers into the market. The data provided by Messari show that almost 64% of ATOM’s current offering is staking.

ATOM staking data. Source: Messari

According to this information, Cosmos investors staking over 180 million ATOM tokens to become ‘Cosmos Hub’ validators, a proof-of-stake blockchain consisting of several hubs on the network. In return, users receive a portion of the network transaction fees and block rewards.

Pentoshi, an independent market analyst,

that the growing number of staking ATOM tokens was decisive in pushing the price higher.

Additionally, he added that ATOM sellers are losing momentum, citing two corrections during the fourth quarter that were cut off halfway by high buying pressure near previous all-time highs.

ATOM / USD daily chart. Source: TradingView / Pentoshi

According to the analyst, ATOM is seeing clear “signs of absorption.”

Avalanche fractal highlights the potential of ATOM

Another analyst, known under the pseudonym ‘Bluntz’,

that ATOM will continue its rally based on similar gains recorded this year by one of its main rival blockchains, Avalanche (AVAX).

Like Pentoshi, Bluntz considers the odds of a return to a previous all-time high as the basis for continuing the ATOM bull run. In a similar scenario, AVAX gained nearly 250% after finding a solid foundation in the support zone between $ 50 and $ 60.

ATOM / USD vs AVAX / USD daily chart. Source: TradingView, Bluntz

According to Bluntz, ATOM could easily reach $ 100 in the medium term.

The ideas and opinions expressed in this article belong solely to the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading operation involves risk. You should conduct your own research when making a decision.

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