For the higher a part of January, the value of Cosmos held effectively inside a spread formation between the $34 and $44 ranges. Nevertheless, the sell-off final week noticed the value plummet beneath the vary lows and retest it as an space of provide. Information of bridge implementation between Cosmos and different chains got here out a few weeks in the past, however a wider market stoop noticed ATOM decline too. The sluggish rise in Bitcoin Dominance doesn’t bode effectively for altcoins both. The BTC Dominance chart has been in a robust uptrend even on decrease timeframes lately and confirmed that altcoins may endure losses within the coming days.
Supply: ATOM/USDT on TradingView
The $44 space (higher purple field) represented the vary highs ($34-$44 vary) in addition to the ATH territory for ATOM, a robust provide space. Earlier this month, it was an indication of bullish power that ATOM was capable of maintain on to this vary even when Bitcoin hovered above $40.5k.
Nevertheless, as soon as BTC dropped arduous beneath this stage, so too did ATOM. Since then a downtrend (yellow) has been established within the decrease timeframes, with the trendline resistance but unbroken.
The $34.5 and $36.7 are a pocket of liquidity on the vary lows, and the latest ATOM bounce noticed this liquidity examined and the value was unable to climb increased.
On the time of writing, the $30 stage and the $31-$32 pocket (purple field) characterize locations on the chart the place sellers would possibly step in as soon as once more.
Rationale
Supply: ATOM/USDT on TradingView
The RSI has remained resolutely beneath impartial 50 prior to now couple of days. The Stochastic RSI was climbing again towards the overbought territory, at the same time as the value traded sideways and the RSI additionally didn’t set up the next excessive. This was an indication that one other leg down may very well be imminent.
The OBV has been in a downtrend alongside value, a sign of the sturdy promoting stress prior to now week. The Supertrend indicator additionally confirmed a promote sign.
Conclusion
A transfer previous $34 and a break of the trendline resistance can be wanted to interrupt the downtrend. Nevertheless, this was unlikely. ATOM would possibly push as excessive as $32 earlier than declining towards the $27 space (cyan field) the place patrons would possibly place sturdy bids. Therefore, the $31 and the $27 areas will maintain some significance within the subsequent few days.
