Cosmos [ATOM] bulls have lastly made a considerable look after a three-month hiatus. This look comes as a welcome reduction from the bearish onslaught that has gone on for what looks as if an eternity. However will ATOM keep its present trajectory or hand over dominance to the bears given the crypto market’s bearish state?
Market complexities and shifting variables present a foggy macro view for ATOM’s mid to long-term outlook. Nevertheless, the short-term outlook provides a a lot clearer image. For instance, ATOM bulls are already exhibiting indicators of weak spot after the newest rally. Let’s have a look at among the components that spotlight the elevated chance of a bearish pullback.
Be careful for short-term revenue takers
ATOM traded at $8.90 at press time, which represents a 57% acquire from its 2022 low of $5.54 in June. Traders who purchased the token close to the underside are sure to start out taking earnings after the current positive factors. This has already began manifesting as elevated promoting stress after the worth crossed above the 50-day transferring common.
The Relative Energy Index (RSI)’s 50% stage has traditionally acted as a profit-taking zone. Retracement or friction is thus sure to occur when the RSI reaches this stage. ATOM’s robust rally has already pushed above the 50% stage and the promoting stress has began to manifest. That is additionally backed by the slight outflows highlighted by the Cash Movement Index (MFI) after peaking simply shy of the 80 stage.
On-chain metrics additional implement an identical short-term outlook. For instance, ATOM’s provide held by whales metric registered some outflows within the final two days. It beforehand recorded vital inflows, confirming that whales have been shopping for at decrease costs. For additional perspective, the provision held by whales elevated from 43.92% on 1 July (its lowest stage in 30 days), to 44.46% by 5 July. It then dropped to 44.28% by 7 July.
The drop in provide held by whales within the final two days additionally aligns with a drop within the Binance funding fee. This confirms a decline within the derivatives market which mirrors the demand within the spot market. ATOM’s buying and selling quantity peaked at 790 million ATOM cash on 6 July earlier than dropping considerably. This confirms the return of some uncertainty close to the present value ranges.
The way forward for ATOM
ATOM’s metrics at present level in direction of a better probability of a bearish retracement after the newest rally. Nevertheless, there’s nonetheless an opportunity that it would prolong its upside if market situations enhance in favor of the upside. This may encourage extra buyers to carry on to their cash quite than promoting for short-term positive factors.