Cosmos (ATOM) Correction Period Might Already Be Over

Cosmos (ATOM) Highlights

• There is resistance at 50,000 and 65,000 satoshis.
• The price broke down from an ascending support line.
• It is trading inside a descending wedge.
• There is support at 42,000 satoshis.
• The price has possibly begun the third wave of a five-wave Elliott formation.

Technical analyst @Lomahcrypto outlined an ATOM price chart warning traders to pay attention to Cosmos since the price is very close to the resistance line of a descending wedge and a breakout could transpire very soon.

03 – Cosmos +12%

> Time to pay attention pic.twitter.com/gp62UNl71j

— Loma (@LomahCrypto) February 21, 2020

Ascending Support Line

The ATOM price has been following an ascending support line since Sept 6, 2019. It continued increasing until it reached the 65,000 satoshi resistance area on Dec 27. The price has been decreasing since and broke down from the ascending support line on Jan 24, 2020. Afterwards, it fell below the 50,000 satoshi area and validated it as resistance. It is currently trading right inside this area once again.

Descending Wedge

Since reaching the aforementioned high on Dec 27, the ATOM price has been trading inside a descending wedge. As mentioned in the tweet, the price is currently in the process of breaking out from this wedge. Volume has begun to pick up but is not extreme yet. If the breakout transpires, which is looking likely, the price would be expected to go to 56,000 satoshis which was the 0.618 Fib level of the entire decrease before returning to validate the 50,000 satoshi area as support.

Long-Term Movement

Looking at the weekly chart, we can see that the correction has possibly ended at the 0.5 Fib level, right at 42,000 satoshis. This is a very likely place for a reversal. The current weekly candlestick is bullish engulfing, and if it closes above the prior wick it would have major bullish implications. If so, the current movement since September 2019 could have been the first two waves, and the breakout from the wedge could be the beginning of the third wave. This move could make a top near 100,000 satoshis, very close to an all-time high. To conclude, the ATOM price is in the process of breaking out from a descending wedge. This could be the beginning of a longer-term third wave that could possibly take the price to a new all-time high.