Crypto nugget: Cosmos (ATOM) continues to be pushed to its limits?

Crypto nugget: Cosmos (ATOM) continues to be pushed to its limits?

In this new Wednesday crypto nugget, let’s review the ATOM cryptocurrency which has been on a long decline for 10 weeks now. The objective of the day is to provide you with a technical analysis of the native asset of theCosmos ecosystem. Will this project, consisting in creating a network of blockchains, be strong enough over the next few months to bring ATOM to old price levels? The task is not simple, far from it. In order to see a little more clearly, let’s move on to our graphs.

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ATOM cryptocurrency on its ultimate level

ATOM rate against the dollar weekly

Since his all time high at $44.7, ATOM continues to fall towards price levels it has not seen since last summer. The trend line which materialized higher and higher troughs was broken on the downside, which gave the first signal of a strong hold of the sellers. Fast enough, ATOM closed below its key level for the year. This price action confirmed the establishment of a weekly downtrend, the one the asset is currently in. However, ATOM is now in its summer 2021 support zone at $8.6/$9.

The current challenge is as follows: monitor the reaction of the price on this level to identify, or not, a reaction from the buyers. It is clear that the difference with last summer is the weakness of buyers. While on three occasions, we had witnessed good matches to defend this area, the interest seems almost non-existent at the present time. In weekly, we can envisage a rebound to correct part of the bearish movement, but for all that this will strongly depend on the macroeconomic context and the interest in risk-on assets.

Since the weekly trend is bearish, it seems preferable to opt for a bearish scenario over the next few months, although this is not absolute. The breakout of the support zone where the price is currently located, formerly a resistance, could result in a reintegration of ATOM into the range zone from August 2020 to January 2021. In addition to a return to the pivot zone at 5.80 dollars, it is entirely possible to have the price fall to the lower limit which was, at the time, 4.80 dollars. And again, the most pessimistic scenario would be a reintegration of the first range with a return to 3 dollars. Of course, rest assured. We are not there yet, far from it.

An asset in a situation of daily lateralization, but for how long?

ATOM cryptocurrency price against the dollar on a daily basis
ATOM rate against the dollar on a daily scale

What we can see on ATOM, it is the relevance of the key levels that we have identified on a weekly basis. Price movements are much easier to understand, hence the need to look for patterns on lower time frames. Since April 2022, we can see the formation of lower lows (LL) and lower highs (LH). These are lower and lower highs and lows. All the more, I remind you, ATOM is on its major support. More than ever, buyers need to regain ground if we don’t want to see a larger bearish scenario.

Currently, ATOM is trading between a recent high of $12.49 and a low of $8.55. As long as the price moves between these two levels, there will be absolutely nothing significant to report. In fact, this will correspond to simple intra-day fluctuations. Thus, if the price registers a candle above its recent high, we will have the signal of a potential change in structure. This could lead to a larger rise in ATOM. In this context, we could consider an optimistic return to 17 dollars, without breaking the downtrend…

Conversely, if the sellers do not tire and continue to push the price lower, watch out for a close below $8.55. This will signify a continuation of the downtrend with a new low, while initiating a downside breakout of the weekly support zone. Thus, it will be necessary to monitor the reaction of the price on this time frame. This bearish scenario could initially take us to $6.95. Then, in a second step, ATOM could come into contact with the pivot zone at 5.40/5.80 dollars. And finally, as mentioned above, a return to the lower limit at $4.80 should not be ruled out.

Yes, the crypto nugget is already coming to an end. However, don’t worry! You can find us for a brand new analysis every Wednesday! While waiting for next week’s asset, you now have all the key levels in your hands to understand the future movements of ATOM. Being currently on a major support, the downtrend could lead to a breakout of the latter. So far, nothing has happened yet. Will buyers show up at the last moment? More than ever, it is imperative to be on our guard on a daily basis to determine, as soon as possible, the future direction that the asset will take.

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