Reasons why COTI could rise by 30%

• COTI price action is about to break out following the formation of a double bottom bullish formation.
• On-chain data shows a positive trend as COTI’s open interest and daily active addresses are increasing.
• A daily candle close below $0.082 would invalidate the bullish thesis.

COTI (COTI), the native token in the privacy-centric layer on the Ethereum network, is approaching the breakout level of the double bottom technical pattern formation on Friday. This breakout of the pattern signals a reversal in favor of the bulls, with the possibility of a 30% upside from current price levels. This bullish projection is further supported by rising open interest and COTI’s active daily addresses.

COTI looks to extend the recent rally

The COTI price rose to close at $0.102 in mid-August, after rebounding from $0.073. From early August to early September, it formed a W-like structure known as a double-bottom technical pattern, which often signals a potential bullish trend reversal. At the time of writing on Friday, it is nearing the breakout level of $0.101, also known as the neckline.

If COTI breaks decisively and closes above the $0.101 level, it could rise 29% to hold its July 27 high of $0.132. This level also broadly lines up with the height of the extrapolated double bottom pattern above.

The Moving Average Convergence Divergence (MACD) indicator, which shows a bullish crossover on the daily chart, further supports this bullish outlook. The MACD line (blue line) is trading above the signal line (yellow line), suggesting bulls are buying. Additionally, it shows rising green histogram bars above its neutral zero line, indicating bullish momentum.

COTI/USDT daily chart

Chain data further supports the bullish outlook. Data from CoinGlass futures shows that open interest (OI) in COTI on exchanges is increasing. OI indicates the total number of outstanding derivative contracts that have not been settled (settled by delivery) and whether the cash flows in the contract are increasing or decreasing.

OI growth represents new or additional money entering the market and new purchases, suggesting an optimistic trend. When OI falls, it is usually a sign that the market is liquidating, more investors are leaving and the current price trend is ending.

The chart below shows that COTI’s OI rose from $10.31 million on Tuesday to $17.54 on Thursday, reaching its highest level since July 28. This indicates that new purchases are taking place.

COTI Open Interest chart

Santiment’s Daily Active Addresses value, which tracks network activity over time, is also positive. An increase in the index signals greater use of the blockchain, while a decrease in addresses indicates lower demand for the network.

In the case of COTI, the index rose 23% from Monday to Wednesday and is the highest since July 24, indicating that demand for blockchain use by COTI is increasing.

COTI active daily addresses table

Despite the bullish outlook projected by technical analysis and chain data, the outlook would turn bearish if COTI’s daily candlestick fails to break the $0.102 level and close below the September 10 low of $0.082. This development would lead to an 11% collapse in COTI price to hold its daily support level at $0.073.