This article provides a technical analysis of Cosmos (ATOM), examining its daily and weekly charts to identify potential patterns and key levels, offering insights into possible future price movements for the cryptocurrency.
Cosmos (ATOM) has been gaining attention as a promising blockchain platform that aims to enable seamless interoperability between different blockchain networks.
The Cosmos ecosystem is expected to experience significant growth in the coming years due to the increasing importance of interoperability among blockchains. As interoperability becomes a crucial feature across various blockchain networks, Cosmos, being an integral part of this ecosystem, is poised to gain substantial traction in the foreseeable future.
In this technical analysis, let us delve into the charts of ATOM to identify potential patterns and key levels that may provide insights into its future price movements.
Daily Chart
On the daily chart, we can observe a presumed bear market bottom in June 2022, marked at $5.87. Following this, there was an upward move from June to September 2022. Interestingly, a fractal pattern resembling this previous period may suggest the possibility of a similar occurrence this year in Q3.
Currently, ATOM is holding the $10.60 support level, which has been maintained since March. However, the price has been consistently forming lower highs, indicating a potential downside break. If the first support level is breached, there is a likelihood of retesting the second support level at $8.78. Holding the second support level could pave the way for a double bottom formation, indicating a bullish reversal pattern.
Daily RSI
Analyzing the daily Relative Strength Index (RSI), we can observe a bounce off the white support trendline at around 37. Additionally, there is a significant green support trendline at approximately 31. This green support trendline holds significance as it has previously acted as a bounce level, with instances in December 2022 and March 2023. Considering this historical pattern, there is a possibility of another bounce in the third quarter.
Weekly Chart
Examining the weekly chart, we can identify a symmetrical triangle formed by the trend lines. However, it is worth noting that the support appears to be diminishing. There is a potential scenario where ATOM retraces to the support block ranging from $9.98 to $8.55. This particular level could serve as a critical point for a back test before a potential upward move occurs.
Final Thoughts
The technical analysis of Cosmos (ATOM) provides valuable insights into its price dynamics. While the daily chart suggests a possibility of a downside break with retesting of support levels, the RSI indicators point towards potential bounces at crucial support trendlines. The weekly chart presents a symmetrical triangle pattern, emphasizing the significance of the support block as a pivotal level to monitor.
It is important to remember that technical analysis is not a crystal ball as we are dealing with probabilities rather than certainties. Market movements can be influenced by various factors; traders and investors are advised to conduct thorough research, consider multiple indicators, and incorporate risk management strategies when making decisions related to Cosmos (ATOM) or any other investment.
Rickie Sanchez is an article writer specializing in cryptocurrency news. Since late 2017, he has been actively investing in cryptocurrencies. He is enthusiastic about everything that has to do with crypto and he hopes that the readers of his articles in the years to come will gain a massive understanding of blockchain technology.
