Disclaimer: The information presented does not constitute financial, investment, trading or any other advice and is solely the opinion of the author
ATOM’s daily structure was bearish at the time of writing.
Financing rates fluctuated, providing sellers with slight leverage.
Cosmos [ATOM] has dropped to a key support level of $10.58. The current level could present an ideal buying opportunity if ATOM bulls defend the support. Notably, ATOM corrected by 18% after price rejected at $12.94 as sellers dominated the market.
Read Cosmos [ATOM] Price prediction 2023-24
In the meantime, Bitcoins [BTC] sharp correction has unnerved altcoin holders as most of the gains made in the first half of April have been erased. ATOM, for example, rose 12% to reach $13, only to fall back to March’s low of $10.6 after BTC’s correction.
Will $10.58 hold again?
The stochastic RSI dipped into the oversold zone on the daily chart, suggesting that sellers may soon be taking a break. Likewise, the RSI was down 40 points at the time of writing, suggesting more buying pressure is likely to emerge.
In addition, the ADX (Average Directional Index) moved slightly up, reiterating that a recovery could be likely.
If so, ATOM could recover from $10.58 and target the local supply zone at $13. However, bulls need to overcome the dynamic resistance hurdles at 50-EMA and 200-MA.
Ergo, a pullback retest or long fuses (similar to the one around March 10) could confirm a potential recovery and signal a buying opportunity.
A daily close below $10.58 invalidates the above bullish statement. The downswing could lead ATOM to sell more aggressively and sink the asset to the January lows of $9.45 or the December swing low of $8.56. These levels can act as short selling targets in such a downtrend scenario.
The funding rates fluctuated
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As of April 20, the ATOMs maintained fluctuating funding rates – an indication of hesitant demand in the futures markets. Fluctuating demand can push sellers to gain more leverage in the market. In addition, the exchange’s long/short ratio showed that sellers had a bit of an upper hand in the medium and long term.
However, BTC’s recovery could sweep sellers off their positions and tip ATOM for a recovery. Therefore, investors should monitor BTC’s price action and overall ATOM sentiment before taking any action.
This post Cosmos [ATOM] shrinks to $10.58 support, here are the key levels to consider
was published first on https://ambcrypto.com/cosmos-atom-shrinks-to-10-58-support-here-are-key-levels-to-consider/