Recognizing potential rebounds and changes in trends is crucial for success. Recently, Cosmos (ATOM) displayed indicators of a potential recovery, highlighted by the TD Sequential buy signal on the weekly charts.
Traders Prepare for a Possible Surge
An analysis by CryptoCrypto illustrated a significant downward trend in ATOM’s charts, followed by a period of consolidation and a shift towards an uptrend.
Key Fibonacci retracement levels are instrumental in identifying areas of support and resistance. ATOM’s price retraced to around the 0.618 (61.8%) Fibonacci level, a common juncture for reversals. This, combined with the recent upward movement, indicated strong support at this level, increasing the chances of a bounce-back.
Moreover, the crossover of the Exponential Moving Averages (EMA) further reinforced this optimistic outlook. The 9-period EMA crossing above the 26-period EMA signifies growing upward momentum.
Such crossovers typically precede a potential price increase, strengthening the premise that ATOM could sustain its upward trajectory.
Buying Pressure Rises as Sentiment Improves
The TD Sequential indicator signaled a buy opportunity on ATOM’s weekly chart. This indicator anticipates trend fatigue and potential reversals for the altcoin.
A buy signal at this stage indicates that ATOM has likely reached a point where selling pressure has eased, paving the way for a potential surge in price. Aligning this signal with other technical indicators can further confirm the positive sentiment surrounding ATOM.
Market Indicators Point to a Shift in Momentum
Furthermore, analyzing consolidated liquidations offers insights into short-term price fluctuations. The data revealed noticeable spikes in long liquidations around the 0.22% and 0.26% levels.
These spikes often signify traders being forced out of their positions, causing temporary selling pressure followed by price recoveries.
Currently, the liquidation level sits at 417.81, relatively low compared to previous peaks. This indicates that there is limited selling pressure from liquidations at present, reducing the chance of a further decline and supporting a potential price upswing.
Potential Breakout on the Horizon for ATOM
Lastly, the Bollinger Bands, a significant volatility gauge, offered additional confirmation of a potential price recovery. ATOM was nearing the lower Bollinger Band, a level that commonly acts as a support level.
This positioning suggests a possible price rebound. Additionally, the Bollinger Bandwidth (BW) indicator registering at 0.05 signals low volatility. Historically, periods of low volatility precede substantial price movements, implying that a volatility upsurge could lead to an upward breakout.
In essence, based on these technical indicators, ATOM appears primed for a potential rebound now.