The Cosmos (ATOM) price has bounced at an important support level and created a higher low. The price is likely to continue increasing towards the closest resistance area as outlined below.
The ATOM price is trading above a long-term support level at $4.40. The price broke out from here in August, before returning and validating it as support the following month.
Currently, the price has made what resembles a double-bottom just above the level, reinforced by long lower wicks and two higher lows.
The daily chart also shows the significance of the $2.45 support area. While the price initially deviated below it on Sept 28, it reclaimed the level and created a higher low.
If ATOM continues moving upwards, the next closest resistance area would be at $6.26, the 0.5 Fib resistance level of the most recent decline.
Cryptocurrency trader @BallMDR3021 tweeted an ATOM chart that shows a breakout from a descending resistance line. They predict a continued rally.
The daily technical indicators support this movement:
- The RSI is above 50 and increasing.
- The MACD is increasing and has almost crossed 0.
- The Stochastic RSI has just made a bullish cross and is moving upwards.
Therefore, ATOM should continue rallying until $6.26.
Since reaching a high on Aug 24, the ATOM price has completed what looks like a bearish impulse (shown in blue below).
Since the previous deviation below the main support area on Sept 28, the price has begun what looks like an A-B-C corrective formation, currently trading in the C wave.
A likely target for the top of the C wave is at $6.69, the length of wave A projected to the bottom of B, and the resistance line of a possible ascending parallel channel.
The chart for ATOM/BTC looks more bearish than its USD counterpart. The price is approaching the 28,000 satoshi support area, below which it has not traded since Oct 2019. A breakdown below this area could take ATOM all the way down to 19,000 satoshis.
Despite being oversold, technical indicators are still falling and show no bullish trend reversal signs yet.
To conclude, while the ATOM/USD price is likely to increase towards resistance, the ATOM/BTC chart has not yet shown any bullish reversal signs, despite being very close to a long-term support level.
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