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, largely fueled by growing confidence in crypto markets. However, the project still faces significant issues that may weigh on it in the future.
Cosmos is currently experiencing a notable breakout which could fuel its momentum 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, near $7-8.
Will Cosmos Rally Continue?
The recent rally came after several notable developments for the project. For one, Cosmos recently held its IBC Eureka Townhall, highlighting its ecosystem. The network also reached a high in developer activity, with 7k weekly commits, ranking third behind Ethereum and Skale.
Moreover, Cosmos is also getting a lot of attention from Coinbase users, with Custody at all-time high levels. Tokens held at the exchange reached 32 million, a figure which shows strong ties between the two ecosystems.
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 exercise too much control.
In addition, centralization impacts network stability, which already came into question near the end of last year. For instance, in October, revelations emerged that a suspected North Korean hacker worked as a developer on the project. Coupled with the recent security concerns, network stability remains a serious risk for the network.
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