Can Cosmos’ latest announcement trigger an ATOM sell-off? Evidence suggests…
Cosmos’ ATOM concluded one other bearish week. Nonetheless, the community lately made one other announcement that may change ATOM’s demand dynamics within the subsequent few days.
Right here’s AMBCrypto’s worth prediction for Cosmos (ATOM) for 2022-2023
Cosmos revealed plans for modifications to its ATOM delegation coverage. In line with the announcement, all ATOM holders which have delegated their cash should unbond them. The method was scheduled to start on 15 October and is predicted to take a couple of days within the week forward.
This was as a result of the unbonding course of can be carried out in batches.
Pricey @CosmosHub Group,
As a part of our ATOM Delegations Coverage, we mentioned the necessity to unbond all our at the moment delegated ATOMs.
This course of can be beginning within the subsequent 24 hours.
Undelegations will happen in batches, and should take a couple of days to finish.
— Interchain Basis (@interchain_io) October 13, 2022
One of many greatest considerations concerning the revised delegation technique was that it would result in an ATOM selloff. The Interchain Basis launched a new delegation policy that may permit validators to re-bond their ATOM. It famous that the quantity delegated by validators can be totally different from the earlier coverage. The coverage additionally famous,
“The variety of ATOMs to be delegated to every validator can be totally different from previous delegations and redelegating would significantly complicate operations.”
To bond or to not bond
Validators can be allowed to cost a fee of not lower than 0% and no more than 10%. This meant that ATOM holders will nonetheless be capable of stake their cash. ATOM’s worth was comparatively secure within the final three days with notably low exercise. This final result would possibly mirror the uncertainty concerning the brand new delegation coverage and its impression on ATOM’s demand.
Alternatively, the revised modifications aimed toward making Cosmos extra environment friendly and aligned with liquid staking. These modifications might enhance investor confidence, permitting ATOM to bounce from its present stage. The cryptocurrency additionally fell by as a lot as 19% within the final seven days. It recovered barely to its $11.78 worth of press time.
Supply: TradingView
So far as on-chain observations had been involved, ATOM maintained robust growth exercise. This was in step with the continuing modifications.
Supply: Santiment
The wholesome growth exercise might not be a robust anchor level for buyers, contemplating the uncertainty. The weighted sentiment metric additionally indicated that investor sentiment recovered barely after bottoming out on 13 October. However, it nonetheless witness a slight downtrend within the final two days following the announcement.
Supply: Santiment
The slight drop in sentiment additionally mirrored investor considerations over the revised delegation technique. Extra so for the requirement to unbond ATOM. As for the prevailing market demand, ATOM’s Binance and DYDX funding charges had been nonetheless up in the previous few days.
Supply: Santiment
This was affirmation that wholesome demand ranges had been nonetheless current within the derivatives market. The latter usually mirrored spot market efficiency. If this stays the case, then the identical metrics might verify that the delegation modifications didn’t have a significant impression on investor sentiment.
