Cosmos (ATOM) Price Breaks Out Critical Resistance, Aiming for Nearly 30% Upside
The Cosmos (ATOM) price has bounced off long-term support and broken above significant resistance levels. It is expected to continue rising in the near future.
The Cosmos (ATOM) price has been falling along a descending resistance line since reaching a high of $15.5 in early February 2023. This move brought the price back to a crucial support level at $6.5 during the week of September 11 to 17 (green arrow).
After the initial recovery, the ATOM price was rejected by the resistance line (red arrow), causing it to drop back to $6.5 once again during the week of October 16 to 22.
At that point, the price formed a bullish pin bar candlestick pattern and broke above the descending resistance line in the following week.
This is a positive signal, indicating that the previous correction has ended, and a new uptrend is likely to follow.
Additionally, the breakout has confirmed the formation of a double bottom pattern. This is a bullish reversal pattern, often appearing at the end of a downtrend.
This pattern is more significant when it occurs on a weekly timeframe and is combined with a bullish divergence in the weekly RSI (Relative Strength Index).
Therefore, the ATOM price is likely to continue rising towards the next significant resistance level at $10, which is 26% higher than the current price.
Breaking this level will confirm that the long-term trend has shifted to an uptrend, and the ATOM price might retest the yearly high at $15.5.
Horizontal Resistance Breakout
The daily chart supports the bullish view from the weekly timeframe. It shows that the ATOM price has broken above the crucial horizontal resistance level at $0.75 with a large bullish candlestick yesterday.
This indicates that the bulls have gained control in the short term.
The daily RSI also supports further upward movement as it surged into the overbought zone without creating any bearish divergence.
The most likely scenario suggests that the ATOM price will continue rising towards the next resistance level at $10.
Breaking above this level could help the price retest the yearly high at $15.5.
Disclaimer: Please note that this article is for informational purposes only and should not be taken as investment advice. As an investor, it is important to do your own research before making any decisions. We are not responsible for any investment decisions you make based on this information. Not Financial Advice.
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