Osmosis Crypto Price Pumps and then Dumps: Here’s Why

Osmosis crypto price went vertical during the weekend as investors cheered the positive developments in its ecosystem. OSMO, the network’s token, soared to an all-time high of $5.15, which was much higher than this week’s low of $0.9088. It has become one of the best-performing coins in the industry.

Why did OSMO soar?

Osmosis is a leading decentralized exchange built on the Cosmos ecosystem. For starters, Cosmos is a smart contract platform that pioneered the concept of Interchain Communication. This means that DEXes built on its ecosystem can easily communicate with other chains like Ethereum, Solana, and Avalanche. IBC was recently upgraded to IBC v3.4.0. 

Osmosis has numerous features. Like with Uniswap and PancakeSwap, the network allows users to swap tokens across multiple chains. It has significantly low slippage and transaction costs. Transactions in its ecosystem are significantly cheap.

Other features in Osmosis are staking and pools, where people can deposit funds and earn returns. According to DeFi Llama, Osmosis has a total value locked (TVL) of more than $176 million. At its peak, its TVL was over $1.34 billion.

Osmosis crypto price jumped after the developers unveiled a new stableswap. A stableswap is a protocol where users can trade stablecoins and earn returns. It will support stablecoins like USD Coin, Tether, and Binance USD. 

Stableswap will leverage a new technology known as curve algorithm, which concentrates tokens in asset pools. As a result, traders will be able to exchange large amounts of stablecoins with minimal price fluctuations.

Osmosis price jumped after the introduction of ICNS, a nameservice within the Cosmos ecosystem. With ICNS, users will be able to own a single name that represents their identity across the Cosmos ecosystem. It is similar to Ethereum Name Service. All name resolutions in ICNS will take place in the Osmosis ecosystem.

Osmosis crypto price forecast

The chart below shows that the OSMO price went parabolic and then pulled back sharply as the initial momentum waned. After soaring to over $5, the token has crashed to less than $2. This spike signals that the coin could have experienced a pump and dump following the positive news in the ecosystem. 

Osmosis price remains slightly above the 25-day moving average, which does not matter a lot at the moment. Therefore, since Osmosis is thinly traded, I suspect that it will experience another round of pump before getting dumped again.