- ATOM may drop as low as $9 as the 2024 ride begins.
- Traders should watch out for the funding rate for a buying opportunity.
Cosmos [ATOM] has started erasing the gains it had in the last 30 days, and according to analyst Ali Martinez, more could be on the way.
His analysis showed that ATOM could start the new year by correcting to $9. Martinez’s post on X showed that he used the Tom DeMark (TD) Sequential to arrive at his conclusion.
The TD Sequential has flashed a sell signal on #Cosmos 3-day chart! This indicator suggests a possible price correction could be on the horizon, potentially driving $ATOM down towards $10, or even as low as $9. pic.twitter.com/FwvXLL6RBp
— Ali (@ali_charts) December 31, 2023
Participants withdraw interest
The TD Sequential indicates the time of exhaustion of a trend and possible price reversal. So, the prediction suggested that buyers involved in pushing the token to $12.25 on the 26th of December were out of the market.
At press time, ATOM’s price was $10.58, representing a 6.38% decrease in the last seven days.
A few days back, AMBCrypto reported a surge in the ATOM price. In that article, we also highlighted how the Comsos network activity has been impressive.
While that article was a booster for ATOM holders, the same cannot be said of this recent prediction.
This led AMBCrypto to check the volume over the last week. According to our analysis of Santiment’s on-chain data, ATOM’s volume had decreased.
As of this writing, the volume was 129.8 million. This was a notable drawdown from the amount on the 26th of December.
Source: Santiment
At that time, the volume was 479.75 million. The volume shows the amount of cryptocurrency traders over a given period. Therefore, the decrease was a testament to the initial notion that buyers had withdrawn their interest in ATOM.
Tired buyers put bears on the wheel
From a technical point of view, the cryptocurrency’s momentum was neck-deep in the bearish zone. This assertion was confirmed by the Moving Average Convergence Divergence (MACD).
At press time, the MACD was -0.020. Negative values of this indicator suggest increasing downward momentum.
So, Martinez’s prediction that ATOM might drop below $10 could be valid. Another indicator supporting the bias is Aroon. As of this writing, the Aroon Down (blue) was 85.71%.
The Aroon Up (orange), on the other hand, was 7.14%. This crossover implies that the downtrend might continue in the short term.
Source: TradingView
Despite the bearish potential, ATOM’s Funding Rate remained in the positive region at 0.039%. This suggested that traders were bullish on the price action at press time. So, more longs are paying a funding fee to shorts.
Read Cosmos’ [ATOM] Price Prediction 2023-2024
However, high funding when the ATOM price is decreasing is not a good entry sign.
So, traders on the sidelines may need to watch out when the Funding Rate flips negative. Another opportunity could also be the period when ATOM reverses to the upside after the potential decline.
Source: Santiment