Cosmos [ATOM]: Traders should watch for this key price movement

Benefiting from the overall positive market sentiment, Cosmos [ATOM] has experienced a significant 65% surge over the past fortnight. The altcoin has recorded substantial gains, breaking above the crucial 200-day EMA level to confirm a bullish perspective.

Traders dealing with ATOM are advised to keep a close eye on key price levels as the current price activity revolves around a pivotal resistance point.

Review of Recent Price Trends and EMAs

The price movement of ATOM has formed a rising wedge pattern, suggesting an increase in buying pressure but also hinting at a potential nearing of a temporary peak in the rally. At the time of writing, ATOM was priced at $6.18, slightly below the critical resistance level at $6.59 and encountering significant resistance from the upper boundary of the rising wedge pattern.

During the rally, the 20-day EMA at $5.33 and the 50-day EMA at $4.92 have offered substantial support, enabling ATOM to surpass the 200-day EMA at $5.88. This breakthrough indicates a possible reversal of the long-term trend in favor of the bullish camp.

A successful breach of the current pattern with a daily close above $6.59 could potentially lead to further upward movement. Notably, the subsequent major resistance level is positioned at $7.14.

Conversely, a breakdown below the current wedge formation could invalidate the short-term bullish bias, with potential support zones around the EMAs and the $5.33 mark.

The MACD recently experienced a bullish crossover, with the MACD line surpassing the Signal line in positive territory. This signals sustained buying pressure. The RSI, currently at 64 after retracing from the overbought region, indicates continued buying pressure dominance while also suggesting the possibility of a correction if buyers fail to breach the current resistance level.

In case of a drop below the 200-day EMA, immediate support for ATOM is expected around the $4.9-$5.3 range. On the upside, the altcoin encounters initial resistance at $6.59, aligned with the upper boundary of the rising wedge pattern. A successful close above this level could pave the way for further resistance at $7.14.

Insights from Derivative Data

Over the last 24 hours, ATOM’s trading volume has decreased by 34.55%, indicative of cautious trader engagement. Moreover, Open Interest has fallen by 4.14%, suggesting that some traders have closed their positions amidst recent volatility, perhaps to secure profits.

The long/short ratio stands at 0.932, indicating a relatively balanced market sentiment with a slight preference for short positions.

However, data from Binance and OKX paints a more optimistic picture, showing long/short ratios for ATOM/USDT at 3.288 and 2.94, respectively, implying that traders on these platforms anticipate a continued uptrend.

Traders are advised to closely monitor Bitcoin’s price movements, as broader market sentiment is likely to impact the next moves in ATOM’s price action.