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Sellers tried to fade a move above $12.25, but the buyers had other ideas. A pullback to a lower time frame area of interest may present a buying opportunity.
Cosmos has broken its way past the $10.6 resistance. This resistance has been a huge obstacle for the bulls since mid-November. For the past two months, the $8.55-$8.8 area has been defended as support.
Read Cosmos price forecast for 2023-24
With Bitcoin also back above $20k, it was likely that both Bitcoin and ATOM would continue climbing higher. The next long-term resistance for Cosmos is at $15.4 and $17. In particular, the $16.4-$17 band could be an optimistic bullish target in the coming month if Bitcoin can also rise to $22, 5k.
ATOM rises past $11.5 to reach swing high at $13.43, should you buy ATOM at $12?
The 12-hour chart shows that the market structure turned to bullish as the price climbed past resistance at $10.6. This also marked the level at which ATOM formed its lowest point on its way down after selling pressure mounted in November.
$10.6 and $11.5 are two key levels of support that Cosmos bulls can bid on. However, it was also possible that ATOM could continue higher without revisiting these two levels as support.
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Analysis of the 4-hour chart showed some consolidation at $12 and between $11-$11.33. A return visit to these zones would likely provide a buying opportunity. The 12-hour bearish order block (highlighted in cyan) was broken and turned into a bullish breaker. This meant that swing traders within this region can look to bid ATOM and target a move towards $15.2 to take profits.
The RSI remained above 70 and showed strong bullish momentum. A bearish divergence has not yet developed; even if it is, a withdrawal need not be immediate. Therefore, short sellers must be patient and cautious. The OBV also posted strong gains to indicate there was real demand behind the rally.
Development activity is picking up and the ATOM funding rate turns positive this weekend
Over Christmas and the New Year, development activity fell well below its three-month low. This has increased in the past two weeks. Another encouraging aspect was that development activity in November did not coincide with prices. The lack of correlation between activity and price would likely encourage long-term investors.
Price volatility also reached a three-month low over Christmas, showing that major movement could follow. This came out as the contraction in prices has shown a violent upward expansion over the past two months. The financing rate decreased sharply on 13 January. This likely highlighted bears trying to fade the rally as prices hit major resistance in the $12.25-$12.5 area. The subsequent move past $13 showed that bulls remained dominant.
This post Cosmos bulls are excited as technical indicators indicate bullishness could continue
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