ATOM price is reaching for the Cosmos, but why?
As a market crash takes place, assets become oversold and typically there’s an “oversold bounce,” “return to mean,” “mean reversion,” or some price snapback to the bottom of the pre-crash range.
Afterward, the asset under study either consolidates, continues the downtrend, or returns to the bullish uptrend if the downside catalyst was not significant enough to break the market structure. That’s all kind of basic trading 101.
This week Cosmos (ATOM) price appears to be following this path and the altcoin is showing a bit of strength with a 35% gain since Aug. 22, but why?
Depending on how you look at it, and technical analysis is by all means a subjective process, ATOM price is either in an ascending channel or one could say a rounding bottom pattern is present with price close to breaking above the neckline.
Resistance above $13 (the horizontal black line in the bottom chart) is currently close to being tested and with sufficient volume and “stability” from the wider crypto-market, the price could be en-route to the 200-day moving average at $17.20.
Of course, if Bitcoin goes belly up at the daily close, or hawkish talk starts to leak out of Jackson Hole, the whole bullish structure for ATOM is likely kaput. So if one is trading, prepare and size accordingly.
If price manages to reach the $17 zone, without skipping a beat, your favorite technical analysts will then say something along the lines of:
“If ATOM price manages to flip the 200-MA to support, continuation to the $27 level could occur.”
Surely you’ve seen that on crypto Twitter lately, but let me find an example.
I bought this $ATOM retest as it's been leading the marketLooking for a move towards $14.4 as long as the lows hold here. pic.twitter.com/FjP8mzdFHK
What
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