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Cosmos [ATOM] shrinks to $10.58 support, here are key levels to consider

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Cosmos [ATOM] drops to key $10.58 support, which may tap bulls for recovery. But the fluctuating funding rates could undermine a strong recovery.

Cosmos [ATOM] shrinks to $10.58 support, here are key levels to consider

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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

  • ATOM’s daily structure was bearish at press time. 
  • Funding rates fluctuated, offering sellers slight leverage.

Cosmos [ATOM] has dropped to a key support level of $10.58.  The current level could offer an ideal buying opportunity if ATOM bulls defend the support. Notably, ATOM corrected by 18% after facing price rejection at $12.94, as sellers dominated the market. 

Read Cosmos [ATOM] Price Prediction 2023-24

Meanwhile, Bitcoin’s [BTC] sharp correction has unnerved altcoin holders as most gains made in the first half of April have been erased. For example, ATOM rallied 12%, hitting $13, only to drop to its March swing lows of $10.6 after BTC’s correction.

Will $10.58 hold again?

Source: ATOM/USDT on TradingView

The stochastic RSI dipped into the oversold zone on the daily chart, suggesting that sellers may take a break soon. Similarly, the RSI faced rejection at 40-mark at press time – pointing to likely building buying pressure. 

In addition, the ADX (Average Directional Index) moved slightly upwards, reiterating that a recovery could be likely. 

If that’s the case, ATOM could rebound from  $10.58 and target the local supply zone of $13. However, bulls must clear the dynamic resistance hurdles at 50-EMA and 200-MA.

Ergo, a pullback retest or long wicks (similar to the ones seen around 10 March) could confirm a potential recovery and signal a buying opportunity. 

A daily close below $10.58 will invalidate the bullish thesis above. The downswing could set ATOM to more aggressive selling and sink the asset to January lows of $9.45 or December swing low of $8.56. These levels can act as short-selling targets in such a downtrend scenario.

Funding rates fluctuated

Source: Coinglass

Is your portfolio green? Check ATOM Profit Calculator

From 20 April, ATOMs sustained fluctuating funding rates – an indication of wavering demand in futures markets. Fluctuating demand could tip sellers to gain more leverage in the market. In addition, the exchange long/short ratio showed sellers had a little upper hand in the mid and long-term prospects. 

However, BTC recovery could sweep sellers off their positions and tip ATOM for a recovery. Hence, investors should track BTC price action and overall ATOM sentiment before making moves. 

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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