ATOM’s 5-day 60% rally is about to be corrected

  • Cosmos is breaking out in consecutive bullish candles after bouncing off support at the 200-day SMA.
  • Growing mentions related to social media suggest that a reversal is imminent in the short term.

Cosmos hoists the bullish flag exceptionally high as the week’s trading stall. The token is up 18% in the past 24 hours, but has recovered a whopping 60% in just five days. Earlier this week, ATOM fell along with other cryptoassets, helping support at $ 5. Meanwhile, the uptrend appears to be losing steam if you touch $ 8.

The cosmos encounters a designed barrier when a correction is imminent

Cosmos price has generally increased within an ascending parallel channel since the collapse in September 2020. The support at USD 3.8 acted as a local low that has given way to the massive moves of the past four months.

The break earlier in the week was compounded by the price below the channel’s mid-line. Several preliminary support levels were bypassed, including the 50 Simple Moving Average and the 100 SMA on the daily chart. However, the 200-day SMA persisted, allowing the bulls to sit down and regain control.

A reversal of the slump has caused Cosmos to climb more than 60% in five days, brushing shoulders with levels above $ 8. Meanwhile, ATOM / USD is trading at $ 7.5 after hitting the upper limit.

A daily close above the top of the channel could result in ATOM giving way to a profit of $ 10. However, if the seller’s overload at this level coupled with the $ 8 overload continues to restrict movement, a correction is needed.

ATOM / USD daily chart

Data shows that the number of Cosmos-related mentions on various social media platforms has increased by 89% in just 24 hours. The rising chatter shows that there is increasing interest and sentiment among investors for this sign.

However, increased alertness is not necessarily a good sign that the uptrend will continue. If prices go up and the crowd is careful, a dump follows shortly thereafter. Therefore, increased attention from the crowd can be seen as a leading indicator of a short-term price correction.

Cosmos mentioned social media

Cosmos mentioned social media

It should be noted that the Relative Strength Index is not yet overbought. In other words, ATOM still has room for growth. Bulls need to break through the two critical levels, USD 8 and the upper bound of the ascending parallel channel, to maintain the uptrend.

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