As $550 million worth of BTC, ETH, and altcoin holdings were liquidated last week; the ATOM price fell along with all other cryptocurrencies, which is why its 35% bounce is causing controversy.
An “oversold bounce,” “return to mean,” “mean reversion,” or some price comeback to the bottom of the pre-crash range frequently occurs after a market crash occurs and assets become oversold.
If the downside catalyst was not substantial enough to disrupt the market structure, the asset under investigation either consolidates, maintains the downturn, or resumes the bullish uptrend. All right, back to trading basics.
This week Cosmos (ATOM) price seems to be going in the same direction, and the alternative currency is displaying some power with a 35% increase since August 22. Yet why?
Technical analysis is undoubtedly a subjective process, but depending on how you look at it, the ATOM price is either in an ascending channel. Alternatively, you could argue that a rounding bottom pattern is there, with the price on the verge of breaching above the neckline.
ATOM Prices Raising To Reach The Cosmos:
Currently poised for testing is opposition above $13 (the horizontal black line in the bottom chart). With enough volume and “stability” from the larger crypto market, the price may be headed toward the 200-day moving average at $17.20.
Of course, the entire bullish structure for ATOM is probably doomed if Bitcoin crashes at the daily close or hawkish chatter begins to emerge from Jackson Hole. Therefore, if one is trading, be ready and size appropriately.
To establish a long swing position, traders need to determine whether ATOM’s upward momentum is due to Cosmos-related fundamentals or merely the “stable” market and Bitcoin and Ether’s trading in predictable ranges.
The analysts at VanEck, a multibillion-dollar asset management company, reportedly predict that the ATOM price will move by 160 times by 2030.