Cosmos: Why a bounce to $7.5 is possible amid strong bearish outlook
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.
- Cosmos faces significant bearish pressure and is headed toward further losses on the price chart.
- The pocket of liquidity northward meant prices could briefly be attracted higher.
Cosmos [ATOM] bulls have struggled to defend critical support levels on the price chart over the past month. The downtrend has not halted and the sellers did not budge from the driving seat. If this selling pressure persists, ATOM could fall to the higher timeframe support level at $6.9, or even lower.
Read Cosmos’ [ATOM] Price Prediction 2023-24
Cosmos has a firm bearish outlook on the price chart across multiple timeframes, and traders can watch out for shorting opportunities in the coming days. A pocket of liquidity was highlighted to the north of ATOM- will we see a bounce to test this zone?
ATOM bulls hang on to the $7.1 support level but for how much longer?Cosmos has a bearish order block on the 12-hour chart at $7.8. On the higher timeframes such as 12-hour and 1-day, the price action had a bearish structure with a series of lower highs and lower lows. This was true on the 2-hour chart as well.
To break the bearish structure, ATOM would need to climb above the recent lower high at $7.27. However, there is a pocket of liquidity in the $7.5 zone, which confluences with a bearish order block on the 2-hour chart.
Therefore, a bounce to this zone would likely present a shorting opportunity. On the other hand, the structure and momentum dictated that continued losses were likely. The RSI was at 42, which showed weak bearish momentum. The OBV has trended downward over the past week and signaled bearish dominance.
Realistic or not, here’s ATOM’s market cap in BTC terms
The rising Open Interest showed some conviction from biddersOn 27 August the Open Interest rose from $62.9 million to $65.7 million even though ATOM prices only saw a minor bounce from $7.1 to $7.2. This showed speculators were eager to bid. However, during that time the spot CVD was sliding downward.
Therefore, genuine demand for ATOM was not present, but this has changed in the past 24 hours. The spot buying pressure has increased slightly. Lower timeframe traders can look to short at $7.26 and $7.5, based on ATOM’s reaction at those regions.