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Analyzing ATOM’s odds for a strong recovery

2min Read

ATOM could stay below the $10 psychological level for a while amidst negative sentiment in the futures market.

Analyzing ATOM's odds for a strong recovery

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Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.

  • H4’s market structure was bearish at the time of writing. 
  • ATOM’s derivative data was negative at press time.

Despite the mild short-term recovery on lower timeframe charts at the time of writing, Cosmos [ATOM] still faces an uphill task. ATOM shed over 20% of its value, dropping from $10.2 to $7.8 after the US SEC categorized it as a “security.”

Read Cosmos [ATOM] Price Prediction 2023-24

 It recovered slightly in the past few days, crossing the $8 level. But the Fed’s decision to pause rate hikes while being open to extra hikes in 2023 has unnerved investors. 

The Fed announcement saw Bitcoin [BTC] drop to $24k and this could exert more bearish pressure on ATOM. 

ATOM to spiral downward further?

Source: ATOM/USDT on TradingView

At press time, the RSI faced a challenge crossing above the neutral mark at 50. It denotes that buying pressure has eased. In addition, the Chaikin Money Flow moved southwards, meaning institutions and whales were distributing at the time of writing. 

So, the indicators point to more downward pressure in the short term. Besides, the H4’s market structure was still bearish and could only flip bullish if ATOM climbed above the previous lower high of $9.63. 

ATOM could retest immediate lower supports and lower lows at $7.83 or $7.0. An extended downswing could push it towards the October 2022 low of $5.550, especially if BTC experiences more losses amidst the ongoing US SEC vs. Binance lawsuit. 

Notably, the $10.22 is a significant resistance level that could block more upside for ATOM if the short-term recovery pushes forward. 

ATOM’s funding rates and OI declined

Source: Coinglass

According to Coinglass, a crypto derivative data tracking platform, ATOM’s funding rate and open interest (OI) tanked after US SEC categorized it as a “security” on 5 June after the Binance lawsuit. 

How much are 1,10,100 ATOMs worth today

For instance, the OI has declined from above >$95 million on 5 June to $75 million at press time. 

Similarly, the funding rates were negative, as illustrated below. It is worth noting that there was considerable improvement in the past few days, but the metric was yet to flash green.

Source: Coinglass


Saman Waris works as a News Editor at AMBCrypto. She has always been fascinated by how the tides of finance and technology shape communities across demographics. Cryptocurrencies are of particular interest to Saman, with much of her writing centered around understanding how ideas like Momentum and Greater Fool theories apply to altcoins, specifically, memecoins. A graduate in history, Saman worked the sports beat before diving into crypto. Prior to joining AMBCrypto 2 years ago, Saman was a News Editor at Sportskeeda. This was preceded by her stint as Editor-in-Chief at EssentiallySports.
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