Disclaimer: The analysis below is the sole opinion of the author and should not be considered investment advice.
- universe [ATOM] We witnessed a patterned collapse and entered a zone of high liquidity.
- Altcoin social dominance and funding rates have deteriorated in recent days.
After falling towards its annual low on June 18, universe [ATOM] The bulls have bucked the broader bearish trend by triggering a series of higher peaks towards the 9-month trendline resistance (white, dashed line).
Click here for AMBCrypto Cosmos price prediction [ATOM] 2023-24
This bullish break has been replaced by a robust ascending channel on the daily timeframe. After an expected reversal from the long-term ceiling, ATOM has swayed near the lower band of the Bollinger Bands (BB).
At the time of writing, alt was trading at $11.5, up 3.88% over the past 24 hours.
ATOM failed from up channel
Despite the “extreme fear” sentiment in the cryptocurrency market over the past few months, ATOM has bucked the bearish trend across the market looking to record consistent gains on the charts.
However, the long-term uptrend exacerbated the selling pressure that induced a patterned collapse. As a result, the price quickly fell below the 20/50/200 EMA, showing a bearish advantage.
A short-term reversal could be seen if the 20 EMA constraint is breached as price action is approaching the BB lower band near the $11.3 support. A breakout of this level will offer a buying opportunity with a target of $14 levels.
However, a bearish crossover at the 20/50 EMA reconfirmed selling strength. If the price does not peak above the 20 EMA, a slow compression phase can occur on the chart near the control point (POC, red). A rising channel and a close below the $11.3 baseline suggest a sell signal.
Additionally, the Chaikin Money Flow (CMF) marked a higher peak as it diverged in a bearish direction with the price action. However, a consistent position above the zero mark could reveal a fundamental increase in the bullish edge.
Is there a possibility that the social advantage and funding rate will decline or reverse?
ATOM’s Binance funding rate turned negative over the past day. This indicator shows that most traders are slightly bearish in the futures market.
In response, ATOM has witnessed a decline in its price action. On the other hand, ATOM’s social dominance has retreated significantly over the past five days. A plausible rebound in this metric could help us find short-term gains in the coming days.
Overall, ATOM was in a relatively high liquidity zone. Trade triggers and targets are described above. Finally, buyers should consider Bitcoin’s move and its impact on the market as a whole to make a profitable move.