Cosmos [ATOM] bulls have lastly made a considerable look after a three-month hiatus. This look comes as a welcome aid from the bearish onslaught that has gone on for what looks as if an eternity. However will ATOM preserve its present trajectory or hand over dominance to the bears given the crypto market’s bearish state?
Market complexities and shifting variables present a foggy macro view for ATOM’s mid to long-term outlook. Nonetheless, the short-term outlook affords a a lot clearer image. For instance, ATOM bulls are already exhibiting indicators of weak spot after the most recent rally. Let’s have a look at among the components that spotlight the elevated chance of a bearish pullback.
Be careful for short-term revenue takers
ATOM traded at $8.90 at press time, which represents a 57% acquire from its 2022 low of $5.54 in June. Buyers who purchased the token close to the underside are certain to start out taking earnings after the latest good points. This has already began manifesting as elevated promoting strain after the value crossed above the 50-day shifting common.
The Relative Energy Index (RSI)’s 50% degree has traditionally acted as a profit-taking zone. Retracement or friction is thus certain to occur when the RSI reaches this degree. ATOM’s sturdy rally has already pushed above the 50% degree and the promoting strain has began to manifest. That is additionally backed by the slight outflows highlighted by the Cash Move Index (MFI) after peaking simply shy of the 80 degree.
On-chain metrics additional implement an analogous short-term outlook. For instance, ATOM’s provide held by whales metric registered some outflows within the final two days. It beforehand recorded vital inflows, confirming that whales have been shopping for at decrease costs. For additional perspective, the provision held by whales elevated from 43.92% on 1 July (its lowest degree in 30 days), to 44.46% by 5 July. It then dropped to 44.28% by 7 July.
The drop in provide held by whales within the final two days additionally aligns with a drop within the Binance funding price. This confirms a decline within the derivatives market which mirrors the demand within the spot market. ATOM’s buying and selling quantity peaked at 790 million ATOM cash on 6 July earlier than dropping considerably. This confirms the return of some uncertainty close to the present value ranges.
The way forward for ATOM
ATOM’s metrics at the moment level in the direction of a better probability of a bearish retracement after the most recent rally. Nonetheless, there may be nonetheless an opportunity that it would prolong its upside if market circumstances enhance in favor of the upside. This may encourage extra buyers to carry on to their cash fairly than promoting for short-term good points.