ATOM: As sell pressure wanes near year low, is a recovery in sight?
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.
- ATOM’s bearish swing looked to bottom out close to key support level.
- Longs bid aggressively in the futures market with the hopes of initiating a rebound.
Bitcoin’s [BTC] dip to $28.5k over the past day rippled across the market with altcoins experiencing significant drawbacks. Cosmos [ATOM] was on a bearish downtrend and an 11% dip in the past 48 hours extended this trend.
Read Cosmos’ [ATOM] Price Prediction 2023-24
With prevailing market conditions extremely bearish, ATOM sellers would be looking to extend their leverage. However, bulls could take advantage of nearby support and recovery by BTC to rally.
Can waning bearish momentum yield a price reversal?
The bullish defense of the $8.98 support level crumbled to intense selling pressure in early August. Bullish attempts to rally from the support level found the $10.25 resistance hard to surmount. This kept ATOM in a range-bound formation until the break below the critical support level.
The bearish breakout accelerated gains by sellers, as bulls struggled to mount a fightback. As of press time, ATOM was trading close to the $7 year low achieved on 10 June.
With the bearish momentum easing, bulls can attempt to use the $7.2 – $7.5 support level to rebound in the short term. However, this would be based on a rise in trading volume. As of press time, the On Balance Volume registered an uptick, highlighting the building interest in demand for ATOM.
Another positive sign for bulls was the Relative Strength Index (RSI) climbing out of the oversold zone. An influx of buying pressure could ramp up the demand for ATOM in the short term, leading to a price reversal.
In the meantime, sellers could look to actively drive prices toward the $7 – $7.3 price zone, if the bullish rebound falters.
How much are 1,10,100 ATOMs worth today?
Bulls look to make a comeback
The exchange long/short ratio showed rallying attempts by bulls in the short term. Buyers held positions worth $30.29m which amounted to a 54.2% market share of all open contracts.
The bullish dominance on the long/short ratio along with positive signs by the on-chart indicators hinted at a bullish reversal in the short term.