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- ATOM bears seem ready to break the bullish defense of the main support level.
- Shorts have a 54.2% advantage in the long/short ratio.
ATOM’s month-long price fluctuation within a compact range appears to be coming to an end with a bearish breakout on the horizon. The altcoin posted a loss of 3.8% in the past seven days.
Read Cosmos’ [ATOM] Price Forecast 2023-24
With Bitcoin [BTC] no clear trend established yet, the indicators showed that the downward momentum was increasing and that ATOM could see lower prices in the coming weeks.
A bearish breakout seems imminent
Source: ATOM/USDT in trade view
ATOM changed its structure to bearish in early March after the price broke below the $11.59 support level. Subsequent price moves saw ATOM range between $11.59 and $12.86 before another wave of selling pressure pushed it towards the key $10.56 support level.
A look at the 12-hour time frame showed that since May 1, the price has been consolidating around the $10.56 support level, with neither the bulls having the firepower to rally nor the bears having the momentum to move lower. However, indicators on the chart suggested that a bearish breakout could be imminent.
The RSI (Relative Strength Indicator) dipped below the neutral 50 and stood at 42.2 at the time of writing. The OBV (On Balance Volume) also decreased slightly, indicating a decrease in demand.
The CMF (Chaikin Money Flow), which had followed a strong upward trend, returned sharply to zero and remained at 0.05. This combination of key indicators moving in line indicated a price break below the $10.56 support level.
On a successful bearish breakout, bears will target the January lows of $9.66. Alternatively, if BTC rises again, bulls may surprise bears to rally from the current support level.
How much are 1,10,100 Atoms worth today?
Shorts prepare to maximize profits
Source: Coinglass
Dates from Mint glass revealed the dominance of shorts in the futures market with shorts holding $10.49 million in open positions. This represented a 54.2% advantage in the long/short ratio. It highlighted the tendencies of market speculators to push the price of ATOM further down.
The aggregate spot Cumulative Volume Delta (CVD) also continued to plummet amid fluctuations in the funding rate. This indicated strong market sentiment in favor of more bearish activity for ATOM.
Source: Coin analysis