- Cosmos breaks out in successive bullish candlesticks after bouncing off support at the 200-day SMA.
- Increased social media related mentions suggest that a reversal is imminent in the short term.
Cosmos is flying the bullish flag exceptionally high as the week’s trading comes to a halt. The token is up 18% in the last 24 hours but has recovered a whopping 60% in just five days. Earlier this week, ATOM tumbled alongside other cryptoassets and embraced support at $5. Meanwhile, the uptrend appears to be losing steam on touching $8.
Cosmos encounters a foreseen barrier as correction impends
Cosmos price has generally been moving higher within an ascending parallel channel since the breakdown in September 2020. Support at $3.8 functioned as the local bottom that has given way to the massive strides made over the last four months.
The breakdown at the beginning of the week was accentuated by the price sliding below the channel’s middle boundary. Several tentative support levels were bypassed, including the 50 Simple Moving Average and the 100 SMA on the daily chart. However, the 200-day SMA stayed put, allowing bulls to compose themselves and regain control.
A reversal from the dip has seen Cosmos rally more than 60% in five days, brushing shoulders with levels above $8. Meanwhile, ATOM/USD is trading at $7.5 after running into the upper boundary barrier.
A daily close above the channel’s upper limit could see ATOM make way for gains heading to $10. However, if the seller congestion at this level, coupled with those at $8, might continue to limit movement, it will call for correction.
ATOM/USD daily chart
Data shows that the number of Cosmos-related mentions on different social media platforms surged by 89% in just 24 hours. The rising chatter around shows that investor interest and sentiment are growing for this token.
However, increased attention is not necessarily a good sign for the continuation of the uptrend. When prices pump, and the crowd starts paying attention, a dump tends to follow shortly after. Therefore, increased crowd attention can be considered a leading indicator of a short-term price correction.
Cosmos social media mentions
It is worth keeping in mind that the Relative Strength Index is not overbought yet. In other words, ATOM still has some room for growth. Bulls must break the two crucial levels, $8 and the ascending parallel channel’s upper boundary, to sustain the uptrend.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
Bitcoin Price Forecast: Analysts anticipate increased volatility as the US presidential election looms
Bitcoin price teased its all-time high of $73,777 last week but declined to trade below $69,000 on Monday. Analysts suggest that market volatility is expected to rise as the US presidential election approaches.
Litecoin poised for double-digit decline after breaking ascending trendline
Litecoin breaks and closes below an ascending trendline, signaling a change in market structure. On-chain metrics paint a bearish picture, as LTC’s dormant wallets are active, and the NPL indicator shows a negative spike.
Top 3 Price Prediction Bitcoin, Ethereum, Ripple: BTC, ETH and XRP decline ahead of US elections
Bitcoin (BTC), Ethereum (ETH), and Ripple (XRP) all faced resistance at crucial levels ahead of the US Elections, leading to a price decline. As of Monday, they neared key support levels, and a firm close below these marks could signal further declines.
21Shares files S-1 for XRP ETF amid ongoing tension between Ripple and SEC
21Shares filed an S-1 registration with the Securities and Exchange Commission (SEC) on Friday for an XRP exchange-traded fund (ETF). While the chance of approval is slim with the current SEC administration, the landscape could change after the upcoming elections.
Bitcoin: New all-time high at $78,900 looks feasible
Bitcoin price declines over 2% this week, but the bounce from a key technical level on the weekly chart signals chances of hitting a new all-time high in the short term. US spot Bitcoin ETFs posted $596 million in inflows until Thursday despite the increased profit-taking activity.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.