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Course Cosmos (ATOM) started a reversal on March 10 and is now approaching a long-term resistance line
Cosmos is a decentralized, scalable, interoperable ecosystem of interconnected independent blockchains, aimed at creating an “Internet of Blockchains” in which participants can interact with each other based on the principles of decentralization. The project’s native token is called ATOM. Holders can stake it or delegate it to a validator to get additional profit.
The results of the technical analysis of the weekly chart show that the prospects for the course ATOM are ambiguous. In September 2021, the price hit an all-time high of $46.68 and has been declining ever since. In June 2022, the market hit a low of $5.54.
However, this is where growth began. ATOM recovered above the $9 area and turned it into support in December of the same year, making a rising low (green icon) in the process.
Although considered bullish, the weekly RSI has not yet made a bullish break of the bearish divergence trend line (green) and soon dipped below 50. Thus, the bullish reversal remains unconfirmed.
If the price continues to rise, resistance around $21.30 will come into play. It is formed by the 0.382 Fibonacci retracement level and the horizontal resistance area. The Cosmos course has not visited these levels since February 2022.
Source: Trading View
Wave analysis of the daily chart outlines a bullish scenario. Here, ATOM, apparently, has already completed the ABC correction, in which the ratio of A:C waves is exactly 1:1.61. This is the second most common coefficient in such correctional structures. After the completion of the correction on March 10 (green icon), the price began to rise and tested the strength of the $10.30 area as support.
In addition, the daily RSI made a bullish breakout of the bearish divergence trend line (in green) in the course of this rise. This is considered a bullish signal that often precedes a significant price increase.
In this regard, the most likely forecast for Cosmos is an increase in the direction of the downward resistance line at $14.30. If this barrier is taken, the price may strengthen towards the $16.80 horizontal resistance area.
On the other hand, an absorption of the March 10 low at $10.29 will neutralize this bullish outlook. In this case, ATOM may fall to the nearest support of $8.80.
Source: Trading View
Thus, the most likely scenario for Cosmos is an increase towards at least the resistance at $14.30, and possibly towards $16.80. Meanwhile, a close below $10.30 would reverse this bullish outlook and could send the ATOM down to $8.80.
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