The Cosmos (ATOM) price has been moving upwards since bouncing at its ascending support line on Dec. 23.
ATOM should move upwards at a faster rate once it breaks out above the current descending resistance line.
Bounce Above Support
The daily chart shows that ATOM has been following an ascending support line since July 27, having most recently bounced from it on Dec. 23. The bounce also validated the $4.05 area as support, which is the 0.618 Fib retracement level of the entire upward move.
While the resistance area is difficult to determine due to numerous upper wicks, it’s likely found at $6.30, the 0.5 Fib retracement of the most recent decline. If successful in moving above, the next resistance area would be at $8.90.
Technical indicators on the daily time-frame are bullish, supporting the possibility that ATOM will reach the $6.30 area and possibly break out.
Therefore, as long as it’s trading above this ascending support line, it should continue increasing towards the resistance levels outlined.
Cryptocurrency trader @CryptoMichNL tweeted an ATOM chart, stating that he believes it will perform well in 2021.
He outlined $9 and $12 as potential take profit levels. The former also coincides with the resistance level we outlined in the first section.
However, to do so, ATOM first has to break out from the current descending resistance line, which has been in place since the $8.87 highs on Aug. 25.
Once it does, it is likely to increase at an accelerated rate towards the resistance levels previously mentioned.
Both the MACD and the RSI readings support this possibility.
Double Bottom for ATOM/BTC?
The chart for ATOM/BTC shows that the price has returned to its lowest levels since Aug. 2019, nearly reaching an all-time low. ATOM is currently trading just above the 18,000 satoshi long-term support area, above the all-time low of 17,940 satoshis.
Despite showing oversold levels, technical indicators have not given any bullish reversal signs.
Therefore, until ATOM/BTC bounces from the current support area and successfully reclaims the 28,000 satoshi resistance area, we cannot consider the trend bullish.
To conclude, the ATOM price is likely to break out above the current descending resistance line and move towards the resistance levels at $6.30 and possibly $9.
Despite trading near its all-time low support level, ATOM/BTC has yet to show any bullish reversal signs.
Disclaimer: Cryptocurrency trading carries a high level of risk and may not be suitable for all investors. The views expressed in this article do not reflect those of BeInCrypto.