Cosmos (ATOM) price analysis: Are you ready for the rally to $12.50?
Cosmos (ATOM) may extend its recovery in the short term
Contents
- Cosmos price technical analysis: Weekly chart
- Cosmos price technical analysis: Daily chart
- Cosmos: Buy or sell at current levels?
The selling pressure in the crypto sector seems to be reducing. That has benefitted Cosmos (ATOM), which is attempting to form a bottom. As of 6 July 2022, the buyers are attempting to propel ATOM toward the psychological level of $10.
THORChain (RUNE) announced the integration of several networks, including ATOM, into its ecosystem on 23 June. This enables swaps between major ecosystems without the use of bridges or wrapped assets.
—
The support for Cosmos was added on 5 July and ATOM investors can now swap the coins with the other supported ecosystems without any wrapping or bridging.
—
Another positive is that dYdX crypto exchange announced that it will be abandoning the Ethereum ecosystem in favour of the Cosmos ecosystem. The exchange tweeted on 22 June that the “dYdX V4 will be developed as a standalone Cosmos-based blockchain”.
—
Peng Zhong, the CEO of Ignite, the company behind the founding of blockchain ecosystem Cosmos, announced on 1 July that he was leaving the firm. It is speculated that Zhong departed following the return of Ignite’s former CEO, Jae Kwon. CoinDesk sources said that more than half of Ignite’s employees left the company along with Zhong.
Could the departure of key executives pull the price down or will the fundamental factors provide support? Will Cosmos go up? Read our ATOM price analysis to find out.
Cosmos price technical analysis: Weekly chart
ATOM’s price has been in a strong downtrend. It declined almost vertically from $32 to $6.77. This fall had pushed the relative strength index (RSI) near the oversold territory, indicating that the selling may have been overdone in the short term.
That has started a recovery, which could face strong selling at the breakdown level of $10. If the price turns down from this level, it will suggest that the bears are attempting to flip the $10 level into resistance.
If that happens, the ATOM/USD pair could again retest the critical support of $6.77. A break and close below this support could signal the resumption of the downtrend.
Contrary to this assumption, if the price breaks above the overhead resistance of $10, the recovery could pick up momentum. The pair could then rally toward the 38.2% Fibonacci retracement level of $16.41.
Cosmos price technical analysis: Daily chart
The bulls are attempting to sustain ATOM’s price above the crucial level of $9 which had acted as a support during the fall. If they succeed, it will suggest that the bears may be losing their grip. The RSI has risen into positive territory, indicating that the momentum favours the buyers.
A close above $9 could clear the path for a possible rally to $12.50 where the bears may again mount a strong resistance. If buyers do not allow the price to dip back below $9 during the next pullback, it will suggest the formation of a higher low.
The buyers will then again try to clear the hurdle at $12.50. If they can pull it off, the pair could dash toward the next resistance at $20.
Conversely, if the price turns down from the current level, it will signal that bears continue to sell on rallies. That could pull the pair down to $7.34 and then $6.77.
Cosmos: Buy or sell at current levels?
Cosmos has reached the breakdown level of $9. If the price turns down from this resistance, it will indicate that sentiment remains negative and traders are selling on rallies. The Cosmos price analysis shows that the pair could then drop to $7.34. Conversely, a break above $9 could clear the path for a rally to $12.50.
The views and opinions expressed in the article are those of the author, and do not constitute trading advice. Trading and investing involve substantial risks, and you should do your own research or contact your financial adviser before arriving at a decision.
