Disclaimer: The information presented does not constitute financial, investment, trading or other advice and is solely the opinion of the author.
- ATOM has reversed its market structure bearishly after falling below $7.17
- The retest of $7 as resistance painted a bleak short-term picture for the bulls
Cosmos [ATOM] has announced that IBC was coming on the Binance Smart Chain. This expansion is expected to provide more opportunities for ATOM to invest in smart contracts. Although this announcement was followed by an 8% increase, these gains have since been erased.
Read Kosmos’ [ATOM] Price forecast 2023-24
A previous ATOM analysis from AMBCrypto highlighted that the $7 level was a key support level. This level has seen a >10% rally over the past week, but the bears have managed to break through this level. What can traders plan for ATOM in the coming week?
The strong bearish intent meant a move towards the September lows was possible
Source: ATOM/USDT on TradingView
ATOM has wiped out all the gains from the past week, and then some. The Fibonacci levels (light yellow) showed a four-hour trading session closing below $6,866, which was the September 26 low. The drop below the 78.6% retracement meant that ATOM was likely heading further south.
The 23.6% and 61.8% extension levels at $6.67 and $6.37 could be places where bulls try to fight. The Relative Strength Index (RSI) of 36 meant momentum was clearly bearish. This also applied to the market structure.
The low at $6.28 represented the low for the month of September and was near the $6.37 extension level. Therefore, a drop below $6.67 would likely fall to the $6.28-$6.37 region before the bulls can come to the rescue.
Market sentiment reflected intense bearishness in recent days
Source: Coinalyse
On October 4, Open Interest (OI) rose slightly as ATOM prices fell from $7 to $6.93. This highlighted that short sellers were in the majority and were willing to short the token’s breakdown below the $7 level.
How much is 1, 10 or 100 ATOM worth today?
Sentiment has not yet turned bullish. Furthermore, the Cumulative Volume Delta (CVD) highlighted that trouble was on the horizon for bulls. The lack of a revival in the CVD meant that the struggle was one-sided. Buyers did not have any say in the market, highlighting the high possibility of continued losses for ATOM.