Sunday, December 4, 2022

Cosmos Looks Primed For A Steep Correction

-


Cosmos’ token looked like it could experience a correction as technicals turn bearish.

Key Takeaways

  • Cosmos has risen by more than 60% over the last week.
  • The recent uptrend appeared to be approaching exhaustion.
  • A spike in selling pressure could push ATOM to $28.

Cosmos looked like it was on the cusp of losing a crucial support level that could lead to significant losses. The pessimistic outlook for ATOM was further validated by a technical indicator and a bearish pattern developing on the token’s 12-hour chart.

Cosmos Faces Possible Retrace

Cosmos looked primed to incur losses over the weekend as multiple bearish signals have appeared.

The interoperability network’s ATOM token had enjoyed a significant rally over the last week. The 20th-largest cryptocurrency by market cap surged by more than 60% since Feb. 24. Now, it looked like Cosmos was bound for a spike in profit-taking that could trigger a steep decline.

The recent upward price action appeared to have led to the formation of a rising wedge on ATOM’s 12-hour chart. As Cosmos moved closer to the pattern’s apex, it could be preparing to break through support. A decisive close below the wedge’s lower trendline could result in a 14.4% correction toward $28.

The Tom DeMark (TD) Sequential indicator added credence to the pessimistic outlook. It was presenting a green nine candlestick on ATOM’s 12-hour chart, which was considered a sell signal. An increase in selling pressure could validate the bearish formation, resulting in a one to four 12-hour candlesticks retracement.

ATOM/USD Chart

ATOM/USD Chart

Source: TradingView

It was worth noting that while the odds appeared to favor the bears, ATOM could have a chance to invalidate the optimistic thesis.

The Fibonacci retracement indicator, measured from ATOM’s low at $21.50 on Feb. 24 to its high at $34.70 on Mar. 4, suggested that a decisive 12-hour candlestick close above the recent high of $34.70 could give ATOM the strength to advance higher. In this eventuality, the asset could rise toward $38 or even $40.

Cosmos’ ATOM token was trading at $32.73 at press time, which put its market cap at about $9.5 billion.

Original Post

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.



Source link

LEAVE A REPLY

Please enter your comment!
Please enter your name here

FOLLOW US

0FansLike
3,593FollowersFollow
0SubscribersSubscribe
spot_img

Related Stories