Cosmos’ ATOM ended another bearish week. However, the network recently made another announcement that could change ATOM’s demand dynamics in the coming days.

Here’s AMBCrypto’s Price Forecast for Cosmos (ATOM) for 2022-2023

Cosmos revealed plans for changes to the ATOM delegation policy. According to the announcement, all ATOM holders who have delegated their coins will have to dissolve them. The trial was set to start on October 15 and is expected to take several days over the next week.

This is because the detachment process will be done in batches.

One of the main concerns regarding the revised delegation strategy was that it could lead to a sell-off of ATOM. The Interchain Foundation has released a new delegation policy that allows validators to rebind their ATOM. It noted that the amount delegated by validators will be different from the previous policy. The policy also noted,

“The number of ATOMs to be delegated to each validator will be different from previous delegations and delegating again would greatly complicate operations.”

To bind or not to bind

Validators may charge a commission of no less than 0% and no more than 10%. This meant that ATOM holders can still wager their coins. ATOM’s price has been relatively stable for the past three days with notably low activity. This result may reflect the uncertainty surrounding the new delegation policy and its impact on ATOM’s demand.

On the other hand, the revised changes were intended to make Cosmos more efficient and in line with liquid staking. These changes could boost investor confidence, allowing ATOM to bounce back from current levels. The cryptocurrency also fell by a whopping 19% in the past seven days. It recovered somewhat to the price of $11.78 per time.

Source: TradingView

As for observations on the chain, ATOM maintained a strong development activity. This was in line with ongoing changes.

Source: Santiment

Healthy development activity may not be a strong anchor for investors given the uncertainty. The weighted sentiment metric also indicated that investor sentiment recovered slightly from the October 13 trough. Nevertheless, it is still witnessing a slight downtrend for the last two days after the announcement.

Source: Santiment

The slight drop in sentiment also reflected investor concerns about the revised delegation strategy. Even more so for the requirement to disconnect ATOM. In terms of prevailing market demand, ATOM Binance and DYDX funding rates were still higher in recent days.

Source: Santiment

This was confirmation that there was still healthy demand in the derivatives market. The latter often reflected the performance of the spot market. If this continues, the same statistics can confirm that the delegation changes did not have a major impact on investor sentiment.





This post Could Cosmos’ Latest Announcement Cause an ATOM Sale? Evidence suggests…

was published first on https://ambcrypto.com/can-cosmos-latest-announcement-trigger-an-atom-sell-off-evidence-suggests/

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