Latest News Letter – Detailed ATOM Technical Analysis (Free Sample)

Detailed ATOM Technical Analysis

Welcome back to another edition of The Crypto City Trading Newsletter, your go-to source for in-depth technical analysis and expert insights into the dynamic world of cryptocurrency trading. Today we are focusing on the Daily and Weekly price action of ATOM/USDT. 

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Total ATOM Market Cap:     $2,238,751,833

Circulating Supply:           390,930,671 ATOM

Total Supply:                   390,930,671 ATOM

Max Supply:                             — 

Overview

This technical analysis provides an in-depth look at the Cosmos (ATOM). It has experienced significant volatility over the past few years, with its price movements being influenced by both macroeconomic factors and developments within the blockchain ecosystem. The analysis focuses on identifying key support and resistance levels, recent price movements, and possible future scenarios. By analyzing these factors, traders will gain insight into the current market condition and make better trading decisions. 

Support zone (Yellow) between $4.336 and $4.664 have been highlighted, showing areas of significant buying activity. However, a resistance zone (Green) at $6.037 – $6.581 and a resistance zone (Pink) at $14.166 – $16.742 have been identified, indicating where selling pressure may limit upward momentum many of the price has been rejected from this zone. 

The analysis also discusses recent price action, which has been marked by a downtrend and a period of consolidation between support and resistance. 

Volume analysis shows relatively not much trading activity, indicating a lack of significant momentum in either direction. This may indicate potential volatility when important support or resistance levels are tested. 

The analysis discusses both bullish and bearish scenarios, outlining potential outcomes depending on price movements above important resistance levels or below critical support levels. The objective is to provide traders with an extensive understanding of current market dynamics, allowing them to predict price movements and adjust their trading strategies accordingly. 

We are now moving toward the chart. 

Weekly chart

In the weekly chart, The price has been trading between the Green zone at $6.037 -$6.581 and the Pink zone at $$14.166 – $16.742 for approximately 777 days. The ATOM price breaks the weekly support zone (Green) and moves towards the monthly support zone (Yellow) at $4.336 – $4.664 and this is the best buying zone. We will discuss the buying plan in the trading setup section.

Key Zones

Monthly Resistance Zone (Blue) $33.726 – $31.445

This zone, marked in blue, represents a significant resistance level that was last tested in the first half of 2022. It indicates the upper boundary where the price faced heavy selling pressure.

Resistance Level $22.155

Historically this level acts as a strong support and resistance. After the price breaks down from this level now it is acting as a resistance. When the price reaches here it could be a strong hurdle to pass on.

Weekly Resistance Zones (Pink) $14.166 – $16.742

  This weekly zone has acted as a strong resistance, multiple times the price has been rejected from this zone. It was a support zone before turning into resistance, indicating a critical area where sellers have dominated. When the price breaks this zone with momentum could lead to a strong upward move.

Weekly Resistance Zone (Green) $6.581 – $6.037

This zone is a current resistance level after the breakdown. The price recently dropped below this zone, indicating potential bearish sentiment. Before breakdown this zone acts as strong support, when the price reaches here it bounces back to the next resistance zone in Pink.

Monthly Support Zone (Yellow) $4.664 – $4.336

This monthly zone marked in yellow shows a historical support level that has provided a base for the price to bounce in the past. This zone could find strong buying interest, leading to a potential bounce. Traders often look for buying opportunities here. If this zone fails to hold, it could lead to further declines and indicate a weakening of the overall bullish structure.

Weekly Support Zone (Purple) $3.311 – $2.996

 This zone, marked in purple, represents a historical support area that could come into play if the price continues to decline. If the price declines to this zone, it may find strong support.

Cosmos (ATOM) currently trading at $5.575 at the time of writing, down 26% approximately in the past 24 hours. This loss has taken the price below the monthly support zone (Yellow), indicating higher selling pressure.

Trend Analysis

The overall trend appears bearish with the recent breakdown below key support levels. Historically, the price has bounced from the monthly support zone (Yellow), suggesting the potential for a bounce if this level is tested.

Volume Analysis

Currently at the time of writing the trading volume is at $11.49M, indicating a lack of strong buying interest. A significant increase in volume would be necessary to confirm any potential reversal or breakout. 

Potential Scenarios

Bullish Scenario

  – If the price manages to reclaim the Green zone and sustains above it, we could see a retest of the higher resistance Level at $8.893.

   – Breaking above the $8.893 resistance would target the next significant resistance at the Pink zone.

Bearish Scenario

 – Continued selling pressure could drive the price down to the monthly support zone in Yellow.

   – Failure to hold this support could lead to a further decline towards the next weekly support in Purple.

Technical Indicators 

Based on technical indicators on a daily time frame 

The relative Strength Index (RSI) value is at 23.237 (Neutral) 

Momentum (10) is at -1.364 signaling a (Sell) 

MACD Level (12, 26) is at -0.415 signaling (Sell) 

Exponential Moving Average (50): 7.466 (Sell) 

Exponential Moving Average (100): 8.281 (Sell) 

Simple Moving Average (100): 8.518 (Sell) 

Exponential Moving Average (200): 8.945 (Sell) 

Ichimoku Base Line (9, 26, 52, 26): 6.490 (Neutral) 

Volume Weighted Moving Average (20): 6.551 (Sell) 

Hull Moving Average (9): 5.969 (Sell) 

Interpretation

The technical indicators and moving averages for ATOM/USDT point towards a strong bearish sentiment. The majority of the moving averages are signaling a sell, suggesting that the current downtrend is likely to continue. The oscillators indicate that the asset is in oversold territory, which could imply that a short-term rebound or consolidation phase might occur. However, the overall strong sell sentiment from both oscillators and moving averages suggests caution.

Liquidation Heatmap

Long-Term Trading Setup

Atom right now is dropping and we see there might be an opportunity to buy when it falls further. So we will buy in parts, we will divide our budget into 3 sections, and allocate for buying at each key support mentioned in the chart.
Here are the numbers where you can buy Atom and the take profits for the trade.

Buy 1: $5.741

Buy 2:$4.664

Buy 3:$3.311

At buy 3 we will go all in because this is the lowest we are expecting Atom to fall.

TP1: $8.893
TP2: $14.166
TP3: $31.445

Conclusion

ATOM is currently facing strong bearish momentum, having broken below a crucial support level. Traders should watch for potential support at the monthly zone around (Yellow) $4.664 – $4.336 USDT. A break below this level could lead to further downside while reclaiming the Green zone could signal a potential recovery. As always, it’s essential to keep an eye on volume and other technical indicators to confirm any potential trend reversals or continuations.

Investment Outlook

Given the current market conditions, ATOM presents both opportunities and risks. The identified key levels should guide investors in making informed decisions. Caution is advised until a clear trend is established.

Your Essential Trading Newsletter

This detailed analysis provides a comprehensive understanding of the current market structure and potential scenarios. Traders can use these insights to make informed decisions and effectively navigate the market.

Stay tuned to The Crypto City Trading Newsletter for more in-depth analyses, market insights, and expert guidance. As always, we strive to empower you with the knowledge and tools needed to navigate the fast-paced world of cryptocurrency trading. Happy trading!

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Warm regards,

The Crypto City Trading Team