ATOM price gives bears knee-jerk reaction as bulls plan counteroffensive back to $12

Cosmos price sees a surprise uptick in the ASIA PAC session on Thursday.
ATOM is primed for another leg higher as bears exit their positions.
Expect to see an important reentry in the pennant formation with a test at $12 this week.

Cosmos (ATOM) price action has stocked up bulls this week and sees them charging against the bearish force that ran price action from $12 to $10.80 since Monday morning. Bulls are finally waking up and are interested in buying ATOM at the current discount, paring back some losses in the process. Expect to see the knee-jerk reaction from earlier in the ASIA PAC this Thursday to become the first stepping stone that will push Cosmo's price up to $12 again.

Cosmos price could see this week turning flat if bulls can pull it off

Cosmos price saw a substantial leg higher on Thursday in the ASIA PAC session, where bulls finally were able to trigger a substantial move up. With that move, the highs of earlier this week got broken and in the process have triggered quite a few stops from bears. This opens up more room to the upside with less resistance from short-sellers as a two-tiered return could easily bring ATOM back to $12 and have it erase all losses for this week.

ATOM first will face $11.40, which comes in at the green ascending trend line. Breaking above that level means that bulls re-enter the pennant formation that has been playing out on the chart over the longer term. Once above there, the moving averages will be near $11.60, which remains the last challenge before bulls can tick $12 at the upper red trend line of the pennant and book 10% in the process.

ATOM/USD 4H-chart

Downside risk comes in the form of a false bounce and bigger decline, which would bear a 10% drop alongside it. ATOM would still make its way up to $11.40, get a rejection against that green ascending trend line and make a nosedive landing next. If that story plays out, expect the low of this week at $10.80 to be tested and quickly broken with the target at $10.20 –the low of last week – as the end of the line in the decline for now.

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