ATOM – Trading in a Bearish Descending Channel
Currently, Cosmos (ATOM ) trades in a descending channel. Typically, this pattern is considered bearish. The price continues to make lower highs and lower lows, respecting the upper and lower trend lines of the channel.
Volume Insights
The volume paints a clearer picture of the market sentiment. We can see a strong selling pressure, evidenced by the highest volume spikes during price drops. But: What stands out is the overall increasing volume, which suggests there could be signs of accumulation happening at these lower levels.
Short-Term Outlook
Long-Term Outlook
If this pattern plays out, ATOM could break down further. However,if this plays out highly depends on the overall crypto market conditions in September and October.
While the pattern is technically bearish, a bullish turn in the market could shift things.
Either way, the trendline will provide a clear signal. A break through the upper trendline with significant volume would be a key indicator that a reversal is underway. Without that, the bearish channel remains intact.
Volume Insights
The volume paints a clearer picture of the market sentiment. We can see a strong selling pressure, evidenced by the highest volume spikes during price drops. But: What stands out is the overall increasing volume, which suggests there could be signs of accumulation happening at these lower levels.
Short-Term Outlook
- In the short term, I lean towards more downside potential. Here’s why :
- Upper trendline rejection: ATOM was once again rejected at the upper boundary of the descending channel.
- Stochastic RSI overbought: The Stochastic RSI is now in overbought territory. Usually, a clear sign of a correction — at least short-term.
- K-line/D-line cross: The K-line has crossed below the D-line, seconding the latter and a sign of potential weakness.
- ADX trend strength: The ADX is still showing a strong trend, further confirming the current direction.
Long-Term Outlook
If this pattern plays out, ATOM could break down further. However,if this plays out highly depends on the overall crypto market conditions in September and October.
While the pattern is technically bearish, a bullish turn in the market could shift things.
Either way, the trendline will provide a clear signal. A break through the upper trendline with significant volume would be a key indicator that a reversal is underway. Without that, the bearish channel remains intact.
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