Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion
- Sellers tried to fade a move above $12.25 but the buyers had other ideas.
- A pullback into a lower timeframe area of interest could present a buying opportunity.
Cosmos has smashed its way past the $10.6 resistance. This level of resistance had been a huge obstacle for the bulls since mid-November. The past two months saw the $8.55-$8.8 area defended as support.
Read Cosmos’ Price Prediction 2023-24
With Bitcoin also back above the $20k mark, it was likely that both Bitcoin and ATOM would continue to climb higher. The next long-term resistance for Cosmos lies at $15.4 and $17. In particular, the $16.4-$17 band could be an optimistic bullish target over the next month, if Bitcoin can also rise toward $22.5k.
ATOM surges past $11.5 to reach the swing high at $13.43, should you look to buy ATOM at $12?
The 12-hour chart shows that the market structure was flipped to bullish when the price climbed past the resistance at $10.6. This also marked the level where ATOM formed its lower high on the way down after the selling pressure increased in November.
$10.6 and $11.5 are two important levels of support that Cosmos bulls can look to bid at. However, it was also possible that ATOM could continue higher without revisiting these two levels as support.
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Analysis of the 4-hour chart showed some consolidation at the $12 mark and between the $11-$11.33 area. A revisit to these zones would likely present a buying opportunity. The 12-hour bearish order block (highlighted in cyan) was broken and flipped to a bullish breaker. This meant that swing traders can look to bid ATOM within this region and target a move up to $15.2 to take a profit.
The RSI stayed above the 70 mark to show strong bullish momentum. A bearish divergence did not yet develop; even if it does, a pullback need not be immediate. Therefore, short sellers should be patient and cautious. The OBV also noted strong gains to indicate genuine demand behind the rally.
Development activity picks up and the ATOM funding rate goes positive over the weekend
Christmas and New Year saw Development Activity drop well below the three-month low. In the past two weeks, this has picked up. Another encouraging aspect was that dev activity did not slump alongside the prices in November. The lack of correlation between activity and price would likely encourage long-term investors.
The price volatility also reached three-month lows during Christmas, which showed a large move could follow. This came true as the price contraction saw a violent upward expansion over the past two months. The funding rate took a steep drop on January 13. This likely highlighted bears trying to fade the rally as prices reached a major resistance at the $12.25-$12.5 area. The subsequent move past $13 showed bulls remained dominant.
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