Cosmos (ATOM) Price Analysis: Bulls Attempt to Recover After Sharp Downturn
- PHPzOriginal
- 2024-08-12 12:11:25546browse
The broader markets saw a strong comeback by the bulls this week after a sharp downfall in the previous sessions. Cosmos (ATOM) price had already been in a declining trend
After a sharp decline in the previous sessions, the broader markets saw a strong comeback by the bulls this week. However, recent sessions saw a strong return by the bulls in the broader markets and Cosmos.
In recent sessions, ATOM made a strong comeback of nearly 15%. At the time of writing, ATOM was changing hands at close to $5.21, showing a positive intraday development of 2.44%.
Despite the recent recovery, investors are worried about another selloff as the long-term trend still indicates bearishness. However, analysts noted a slight change in the on-chain data. This hinted that the recovery may continue to prevail rather than any correction ahead.
Investors’ Sentiment Improves as Weighted Sentiment Curve Shifts Positively
As the broader market regains strength, investors are searching for potential cryptocurrencies that may generate short-term returns on their capital.
Despite being in a long-term bearish trend, Cosmos (ATOM) has the potential to generate impressive short-term returns, according to analysts.
In recent sessions, analysts have noted a significant development in an important on-chain metric- weighted sentiment.
Recent sessions saw a rapid increase in positive sentiment. Moreover, the curve shifted to positive territory, indicating a continuation of the recovery.
The weighted sentiment curve represents the current bias of the traders and investors, whether positive or negative, and where it is headed. A positive sentiment dominates if the weighted sentiment curve hovers above the zero line and vice versa.
Cosmos Price Technical Analysis: Resistance at Golden Zone, RSI Shows Recovery
From a technical standpoint, Cosmos’ price was poised for a recovery following a sharp crash. Lagging below the 20, 50, and 200-day EMAs, ATOM reflected a strong bearish trend in the previous sessions.
On the higher side, the next immediate hurdle lies around $5.7. The previous support zone has now turned to resistance. Additionally, the $5.7 level is significant as it is the golden zone of Fibonacci retracement tools.
Drawing from the recent swing high of $6.8 to the recent swing low of $4, the 50% zone emerged at the $5.7 level. The 50% zone of Fibonacci is crucial for a trend continuation and a trend reversal.
If ATOM breaches the $5.7 level and continues to rise, a bullish reversal may be observed on the charts.
On the other hand, if the recovery fails to gain steam near the 50% retracement zone, it may present a sell-on-rise opportunity for the bears. The price may experience further declines.
At press time, the Relative strength index line was recovering from an oversold zone and stood at 40.30 points.
On the other hand, the 14-day SMA line was situated around 34.72 points, and a bullish crossover between both lines was observed, indicating a price recovery.
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