Cosmos (ATOM) Price Trading Inside a Bullish Pattern, Is a Breakout Happening?
The price of Cosmos (ATOM) is trading within a long-term bullish pattern and forming decisive bullish signals. It is expected to break out above the pattern and rise higher.
Descending Parallel Channel
The price of Cosmos (ATOM) has been trading within a decreasing parallel channel since September 2022. This is a bullish pattern, which often leads to a breakout in most cases. This means that the bulls have an advantage when the price is trading within this pattern.
Indeed, after being rejected by the channel’s resistance in the last week of 2023 (red arrow), the ATOM price bounced off from the middle line of the channel last week (green arrow).
This shows that the sentiment has shifted from selling on rallies to buying on dips and is a sign that a breakout will occur.
The weekly RSI indicator has bounced up from the 50 level at the same time the price bounced up from the middle line of the channel, supporting the possibility of a breakout.
If a breakout occurs, the ATOM price could rise to the next important resistance level at $17. This number corresponds to a 67.29% increase from the current price.
Although the price bounced up from the middle line of the channel on January 8, 2024 (green arrow), it has not been able to start a strong recovery.
Instead, it has created a lower high on January 12, confirming that the ATOM price is still correcting.
The daily RSI indicator has cut down below 50 and sloping down, indicating that the bears have regained control.
Therefore, the ATOM price may retest the middle line of the channel at $8.7 before making another breakout attempt.
The most likely prospect shows that the ATOM price will continue to rise in the near future. The potential target for this move is $17.
However, the ATOM price may correct to the middle line of the channel at $8.7 before continuing to rise.
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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