ATOM: Assessing the odds of a long-term downtrend prevailing
Disclaimer: The knowledge offered doesn’t represent monetary, funding, buying and selling, or different kinds of recommendation and is solely the opinion of the author.
Bitcoin [BTC] climbed previous the $20k mark, however even on the time of writing, the value dipped again to $19.9k. This highlighted how necessary a resistance of $20.2k-$20.8k was for BTC. Cosmos [ATOM], like many different altcoins, has a behavior of climbing increased on the charts alongside Bitcoin. Subsequently, any weak spot from the king would possible be mirrored within the worth motion of ATOM itself.
ATOM- 12-Hour Chart
Supply: ATOM/USDT on TradingView
On the 12-hour chart, it may be seen that the previous two months of buying and selling have been a part of a gentle downtrend. Despite the fact that ATOM managed to bounce from $5.55, the longer-term pattern remained unchallenged.
With a view to flip the bias from bearish to bullish, the value must climb previous $10 and retest the $9.5 space as a requirement zone. The Relative Energy Index (RSI) was above impartial 50 to point out that the previous few weeks had some bullish momentum.
The On-Steadiness Quantity (OBV) had additionally crossed above resistance from mid-Might and prompt that demand was behind the rally from the $6 zone.
ATOM- 4-Hour Chart
Supply: ATOM/USDT on TradingView
On the four-hour chart, your entire space from $8.7-$9.5 has seen important buying and selling exercise early in June. This demarcated this space as a zone of provide the place sellers would possible be robust.
On the similar time, the previous three weeks have seen ATOM kind a sequence of upper lows and better highs on the value charts, suggesting a bullish transfer. But, would this provoke an uptrend, or was this a pullback earlier than one other slide downward for ATOM?
The upper timeframe charts confirmed that ATOM would want to climb above $10 and $12.4 to flip the bias from bearish to bullish. Within the meantime, bulls would wish to see the $8.6 space (cyan field) defended, and could be anticipating a transfer towards the $9.5 mark.
Supply: ATOM/USDT on TradingView
Bullish market members can discover the value charts encouraging. The RSI backed up their bullish notion, and was nicely above the impartial 50 and confirmed an uptrend in progress prior to now week. Nonetheless, despite the fact that the value made a better excessive above $8.6, the OBV was unable to push increased.
Actually, the OBV remained flat over the previous week, as did the Chaikin Cash Movement (CMF). This prompt an absence of shopping for strain behind ATOM’s rally.
Conclusion
Cosmos has seen consumers prior to now few weeks, however they look like preventing an uphill battle. The $8.6 space offered a horny, comparatively low-risk alternative to purchase Cosmos. A stop-loss beneath $8.4 may be set, and a retest of the demand zone generally is a shopping for alternative.
But, the volatility of Bitcoin may catch merchants unawares, and cautious place sizing could be key to danger administration.
