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ATOM can’t recover from a sharp drop

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ATOM can't recover from a sharp drop

ATOM can’t recover from a sharp drop
CONTENT

  • ATOM met support above the $ 5 level

  • Near-term indicators paint a bearish picture

  • In the short term, the price is expected to fall

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Cosmos (ATOM) has been falling since August 25, and if the long-term picture remains bullish, it is also expected to have a wave of decline in the near term, followed by a resumption of the bullish trend.

Rollback to support

ATOM is down from the high of $ 8.84 reached on August 25. The price bounced sharply from this level, accelerating the fall in early September.

Despite the sharp drawdown, the integrity of the overall bullish structure was not violated. ATOM is continues to trade above $ 5 support and upward support line from June lows.

ATOM can't recover from a sharp drop

ATOM Chart by TradingView

Technical indicators signal bearish risks

Technical indicators on the daily chart indicate oversold and neutral prospects for the coin. MACD began to rise, while the stochastic RSI and the RSI itself are falling, with the former looking oversold.

Also, the price has yet to break through the resistance from the September 5 bearish engulfing candle..

However, near-term indicators paint a bearish picture. MACD is declining, stochastic RSI has almost formed a bearish crossover, and RSI met resistance at the 50 mark.

Moreover, the price has not yet reached the 0.382% Fibonacci retracement level relative to the previous fall, which means that the current dynamics is more of a correction than the beginning of a new uptrend..

Wave analysis

Cryptocurrency trader @ crypto618 recommends selling ATOM, which is now in the fourth wave stage, followed by a fall.

On March 13, the altcoin started forming a bullish impulsive wave structure (highlighted in black on the chart) with an extended third wave. At the moment, the price is in the fourth wave.

This analysis will no longer be relevant if the price falls below the April 30 high of $ 3.077. In this scenario, the coin will also drop below the upward support line connecting the bottoms of the first two waves.

ATOM can't recover from a sharp drop

The decline from the August 25 highs implemented in five waves instead of three (blue on the chart).

This means that ATOM has either completed the bullish structure and started bearish, or is in the A-wave stage of a full correction. The second option looks more likely.

Altcoin is likely to fall anyway before resuming growth..

Perhaps the top of wave 4 has already formed around $ 5.70, and now quotes can go to $ 3.60.

So, the altcoin is likely to dip to $ 3.50 before resuming the rise..

Disclaimer

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