The price of Cosmos has increased by 10% today, and it is now trading at 12.94 euros. Is this due to Kujira and the new stablecoin? Time to dive into the charts!
Cosmos (ATOM) price rises 10%
Last night at 23:00 the price of Cosmos was briefly 13.34 euro, meanwhile the value is 0.30 euro lower, but that does not detract from the impressive rise. Incidentally, this is not the highest value of this year, in January Cosmos was briefly 39.22 euros, which was also the highest value ever of the currency.
Technical analysis Cosmos (ATOM)
What else do we see on the charts? For that we need more detail and it is time for Tradingview. Below is each candle for 1 day. Since June 16, the price of Cosmos has been in an upward channel, represented by the orange lines.
The blue line shows the moved average indicates the past 200 candles, or the past 200 days. The black line looks at the average of a slightly shorter period, namely the past 50 days.
Since July 16 the black line serves as support, not only for the candles, but also for the orange channel. Just under a week ago the price dropped through the orange channel but found support on the 50MA. It is now important to get back on track in the long term. In order to do so, the price has to rise to just under 16 euro.
In March the black line dropped below the blue line. This means that the price is doing worse in the short term than in the long term. This is called a death cross. If the short-term line surpasses the long-term line again, this is called a golden cross called the golden cross. This is incredibly bullish for the stock price and indicates that the market is ready to invest at that time.
But there is more to the story. For there is a real stablecoin announced For the Cosmos ecosystem. Not by Cosmos itself, but by Kujira.
Cosmos gets a stablecoin from Kujira
Initially Kujira developed their stablecoin project on Terra’s blockchain, but after the collapse of this ecosystem the project was migrated to Cosmos.
The stablecoin is called USK and its value is intended to be equal to the US dollar. Kujira seems to have copied from the wrong party, as they use cryptocurrency as collateral for their stablecoin. Terra also did this, for their own stablecoin they used their other crypto Luna to keep the price at $1.
Learning from Terra’s mistakes
USK will be supported by the crypto Atom and later Kuji will be added. This is the token of Kujira. Users can exchange these two coins for the stablecoin USK. If many traders exchange their Atom for USK, in theory this is good and bad for the exchange rate. This is because there is a fork in the road, but it also ensures that there are fewer coins in circulation.
The whole project smells very much like what went wrong at Terra, but hopefully they will learn from the mistakes and take a different approach.
In a blog post the team behind Kujira wrote that the inspiration to develop USK came from the decentralized lending protocol MakerDAO and its stablecoin DAI.
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