Key Indicators for Cosmos [ATOM] Traders to Consider Before Going Long

Recent market movements in Cosmos [ATOM] have shown a strong recovery after bouncing from a significant long-term trendline support. The altcoin displayed a symmetrical triangle pattern on its daily chart, coinciding with a bullish momentum following Bitcoin’s surge to a new all-time high surpassing $75K.

Given these developments, it is important to assess whether ATOM can sustain its current bullish trend or if it might experience a pullback in the near future.

Anticipated Market Movements

Following a successful rebound from the critical trendline support (marked in white, dashed), ATOM has been trading around $4.50, slightly above both the 20-day EMA ($4.35) and the 50-day EMA ($4.47), which have acted as significant resistance levels. A definitive close above these EMAs could potentially pave the way for further upward movement towards the $5.66 resistance level.

In case ATOM fails to maintain levels above these EMAs, a downside correction towards the $3.65 trendline support is likely, considering its historical significance as a stable support level over recent months.

At the time of writing, the RSI was around 53, indicating neutral market momentum with a slightly higher buying pressure. A sustained rise above the 60-mark could signal a resurgence of bullish sentiment, while a drop below the 40-level would imply a weakening trend.

Crucial Levels to Monitor

Support Levels: Immediate support for ATOM is around $3.65, aligned with the long-term trendline, with a breach potentially leading to a deeper decline towards $3.11, another crucial support level.

Resistance Levels: Upward movement may face resistance at the 50-day EMA ($4.47) and $5.66. A successful breakthrough these levels might propel ATOM towards testing higher levels, subject to prevailing market sentiments.

Insights from Derivative Data

The trading volume of ATOM recorded a notable decline of 27.67% over the past 24 hours, indicating cautious trading activity amidst recent market fluctuations.

Despite the drop in trading volume, Open Interest increased by 1.39%, suggesting investors retaining their positions and potentially foreseeing a breakout or reversal in trend.

The overall long/short ratio for ATOM stood at 0.9736, reflecting a relatively balanced sentiment. Notably, long/short ratios on Binance and OKX were quite bullish, at 2.864 and 2.68, respectively, signaling optimism among traders.

Furthermore, analysis of Binance liquidation data indicated more short liquidations than longs, implying that recent price movements might have caught bearish traders off guard. Traders should also keep a close eye on Bitcoin’s performance, as it is likely to influence broader market trends and impact ATOM’s price movement.