- ATOM(Cosmos) bearish structure continuation and price drop
- Break of double bottom on weekly time frame can drop value significantly
- Influential factors that can cause deviation in the price of ATOM
Weekly Perspective:
In the weekly time frame, ATOM is trading within a downward parallel channel. The upper line of the channel represents a strong resistance, while the lower line serves as a robust support line. Atom is forming a Lower Highs and Lower Lows structural pattern, indicative of a bearish trend. One notable observation this week is the breach of one of ATOM’s strongest support lines. A trendline drawn between the COVID-19 lows and the lows of June 2022 used to provide substantial support for ATOM. Even during the BTC drop from $30,000 to $25,000, this trendline offered support and boosted ATOM’s price. However, this trendline was broken during the previous week’s downturn, and ATOM is now trading below it, suggesting a potential further decline in the coming days. ATOM’s ability to maintain the trendline support will determine its performance; otherwise, a significant price correction seems likely. The weekly Relative Strength Index is at 33, indicating the possibility of further oversold conditions. Additionally, a bearish Moving average convergence/divergence crossover has been present since the third week of April.
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In the weekly timeframe, there is also a double top pattern in ATOM, and the neckline of this pattern has been breached. The double top pattern itself is bearish, and it could contribute to future price declines for the coin.
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Daily Timeframe Perspective:
Looking at the daily timeframe, another downward parallel channel is evident in ATOM’s price movement. The upper channel boundary has led to price decreases four times, while the lower boundary has caused two price increases. Even within this channel, ATOM is adhering to the Lower Highs and Lower Lows structural pattern, underscoring the continued effects of this pattern on the falling price. On the daily chart, the Relative Strength Index stands at 31, and the Moving average convergence/divergence is in negative territory.
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ATOM’s last stronghold lies within the horizontal support range of $7.13 to $7.5. A breach below $7 would trigger a sell-off, potentially causing the coin’s price to drop further. Beyond this level, the next substantial support for ATOM is projected around $5.6 to $5.9. Therefore, falling below $7 could lead to a price range of $5.6 to $5.9 for ATOM.
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Influential Factors in Deciding ATOM Price Move:
Market sentiment is set to play a pivotal role in ATOM’s survival and its ability to maintain crucial support levels. Unfortunately, sentiments for the upcoming week do not appear favorable. BTC continues to decline, with expectations of touching $25,000 to $25,200 to establish a solid support within this range. Furthermore, if sell-offs are observed in the S&P 500 and NASDAQ, it could translate to a downward trend in the crypto market as well.
Conclusion:
In conclusion, the weekly and daily perspectives for ATOM paint a challenging picture for its near-term performance. The bearish trend within the downward parallel channels, combined with the Lower High and Lower Low patterns, signifies the coin’s struggle against market pressure. The breach of key support lines, including the impactful trendline connecting past lows, has added to the uncertainty.
ATOM’s fate now rests on maintaining the horizontal support range between $7.13 and $7.5. A failure to hold above $7 could lead to further selling pressure and a potential decline towards the $5.6 to $5.9 range, the next substantial support zone. Notably, the double top pattern’s neckline breach and the persistently negative Relative Strength Index and Moving average convergence/divergence indicators reinforce the bearish sentiment.
Market sentiment remains a critical determinant for ATOM’s survival. With Bitcoin’s continued descent and the potential for broader market sell-offs, the crypto market faces added vulnerability. The upcoming week presents challenges, and ATOM’s ability to weather these conditions will influence its trajectory.
In this evolving landscape, traders and investors must closely monitor price movements, technical indicators, and broader market dynamics to make informed decisions regarding ATOM and its potential price developments in the days ahead.
Chart from TradingView
