ATOM: Can bulls rally from $8.53 support level?
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.
- ATOM’s 19.5% gains saw it reclaim key support level.
- The futures market leaned towards bearishness despite recent gains.
The past seven days have seen Cosmos [ATOM] shake off some uncertainty after it was named in the US SEC lawsuit against major cryptocurrencies. ATOM posted gains of 19.5% within the seven-day period to reclaim the $8.53 support level.
Read Cosmos [ATOM] Price Prediction 2023-24
With Bitcoin [BTC] consolidating at the $26.5k price zone, bulls could be looking to register further gains from the key support level.
Is recovery in the works?
ATOM’s bearish slide reached a new low on 10 June as it sank to the July 2022 price of $7. The bearish candle on the 12-hour timeframe broke through the $8.53 support level, which was last tested in December 2022.
However, bulls reacted swiftly at the $7 price zone to record moderate gains of 19.5% between 10 June and 17 June. This lifted ATOM back above the $8.53 price level. ATOM’s last rally from the $8.53 support level saw it reach a YTD-high of $15.45 in February 2023.
With price consolidating just above this critical support level, the odds are increasingly likely for another significant bullish rally.
The capital inflow highlighted the bullish possibility, with the Chaikin Money Flow (CMF) posting a positive reading of +0.15 as of press time. The On-Balance Volume (OBV) also remained on a slight uptrend to show steady trading volume.
Nonetheless, the Relative Strength Indicator (RSI) served as a note of caution for bulls, as it remained under the neutral 50 mark despite pushing strongly out of the oversold zone.
The immediate target for bulls will be $10.56 and a bullish structure on the lower timeframes could accelerate this move. On the flip side, weakened buying pressure at the press time support level of $8.53 could push ATOM back toward the $7 price zone again.
Futures market tells a different story
Speculators in the futures market didn’t provide any encouragement to bulls, as the funding rate on the higher timeframes remained negative, as per Coinalyze. This signaled that the markets were being primed for more bearish activity.
How much are 1,10,100 ATOMs worth today?
The liquidation data echoed the bearish sentiment, as $290.25k worth of long positions were liquidated over the past 24 hours. This represented 99.4% of the total liquidations during the period.
A bullish ATOM could be highly dependent on Bitcoin [BTC] achieving significant bullish traction in the coming days.