ATOM hits another year low: Can sellers extend gains?
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.
- ATOM crashed to another year-low of $6.6.
- Negative funding rates along with dipping Open Interest could lead to further losses.
Cosmos [ATOM] hit a new low of $6.6, as sellers extended their bearish dominance by breaking below the critical $7 support level. The $7 support level had rebuffed the bearish swing in June but the selling pressure in late August caused the bullish defense of the level to cave.
Read Cosmos’ [ATOM] Price Prediction 2023-24
Bulls overwhelmed by selling pressure
The bearish momentum on ATOM’s price chart began in Q1 2023. The large dip from the $15 price level was briefly resisted by bulls at the $10 support level. However, the break of the previous bullish run’s higher low in early June unleashed a massive wave of selling pressure.
This sunk ATOM to a year-low of $7 before a quick recovery. Despite the pullback, the bearishness persisted in Q3 and resulted in new lows for ATOM.
While bulls looked to rebound, the indicators didn’t look favorable. The Relative Strength Index (RSI) remained around the oversold zone to highlight a lack of buying pressure. On the other hand, the On Balance Volume (OBV) registered decent trading volume, although it also dipped slightly in September.
A retest of the new resistance at $7 could see ATOM sink lower toward $6 to $6.5. These price levels also serve as a support level on the weekly timeframe. On the flip side, a bullish reversal will need buyers to scale the present hurdle at $7 before embarking on a decent rally.
Declining Open Interest hinted at more losses
How much are 1,10,100 ATOMs worth today?
The sharp drop of the Open Interest on the lower timeframes hinted at more losses for ATOM. According to Coinalyze, the OI dropped by over $1 million, as prices continued to dip.
This pointed to an extension of the bearish momentum in the mid-term. Similarly, the Funding Rate remained in negative territory, as buyers continued to be wiped out.