What investors can do as Cosmos [ATOM] approaches key structural support level

Because the world waits to see whether or not the crypto market will escape of its fortnight vary, ATOM’s value motion is already favoring the bears. It has achieved a big draw back to this point this week and is at the moment headed for a retest of a key structural help degree.

ATOM traded at $9.77 at press time, after tanking by 8.85% within the final 24 hours and roughly 8% within the final seven days. Its present value degree appears to be buying and selling inside structural help territory close to the $9 value degree. This is a vital help vary as a result of it held effectively over the last bearish drop within the second week of Could.

The precise value degree offered help over the last bear run in June and July. The worth bounced again a number of occasions from the identical help vary. An analogous retest occurred just a few hours earlier than this press, however the actual query is whether or not the identical help degree will end in the same bounce-back.

ATOMUSD 2022 05 26 17 43 15

Supply: TradingView

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Regardless of the bearish value motion, ATOM’s RSI remains to be hovering above oversold territory. A dip beneath help would probably create a lower-low to higher-high setup between the worth and RSI, therefore a bullish signal. The MFI means that buyers have been aggressively accumulating ATOM as the worth drops.

What can we be taught from ATOM’s on-chain metrics?

So far as on-chain metrics are involved, each the Binance and FTX funding charges demonstrated indicators of weak point within the final two days. This means decrease curiosity from the derivatives market, an indication that buyers turned extra cautious.

ATOM’s on-chain quantity dropped considerably throughout the identical interval. Regardless of the above observations, the whale promoting stress died down in the previous couple of days. The provision held by whales appears to have bottomed out in the course of the weekend and even registered some uptick. This statement may level in direction of the next likelihood that the $9 help degree will beat back the bears.

Cosmos ATOM 18.38.49 26 May 2022

Supply: Santiment


Present information suggests a big likelihood that ATOM’s structural help will maintain sturdy. In that case, we’d see a big bounce-back close to the $9 value vary. Nonetheless, the market remains to be susceptible to unprecedented adjustments within the information few days. Which means there’s nonetheless vital threat that ATOM may break help and search extra draw back, therefore buyers ought to tread cautiously.

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