Key Takeaways:
- Cosmos native token has broken out of a bullish reversal pattern.
- ATOM prices have jumped nearly 50% in three days.
NEW DELHI (CoinChapter.com) — Blockchain platform Cosmos’s native token ATOM prices have been on a bull run since Sept 7.
The token gained nearly 50% between Sept 7’s low of $11.5 and Sept 9’s intraday high of $17.2. The uptrend might have resulted from ATOM prices breaking out of a bullish technical pattern called the rounding bottom.
Analysts also call the pattern a saucer bottom. A series of price movements that graphically form the shape of a “U” form the bullish pattern, representing a long consolidation period from a bearish bias to a bullish bias.
The price target for the pattern is calculated by measuring the distance between the lowest point of the pattern and the neckline and then adding it to the breakout price level.
Also Read: 3 reasons why Cosmos (ATOM) could rally 1,200% by 2030.
Therefore, by the rules of technical analysis, ATOM prices might reach $26.2 if the uptrend continues, a jump of nearly 58% from current prices and 116.5% from the breakout level. Moreover, ATOM’s exponential moving averages formed another bullish pattern called the Golden cross on the daily charts.
ATOM’s Overbought RSI Might Trump The Golden Cross
In detail, ATOM’s 20-day EMA (red wave) moved above its 100-day EMA (blue wave) to form the bullish pattern. Traders usually consider the pattern an indicator of positive market sentiment and a buy signal.
Meanwhile, the Cosmos token prices have been charting higher lows, testing multi-month ascending trendline support. Despite the wider crypto market bearing the brunt of macro headwinds, ATOM prices have been trending upwards since mid-Jun this year.
Meanwhile, ATOM’s recent uptrend saw prices chart a four-month high, as the Cosmos token jumped nearly 25% on Sept 9, going from the day’s low of $13.8 to reaching an intraday high of $17.2 before pulling back.
If the uptrend continues, ATOM prices will target immediate resistance near $17.3. Moving above immediate resistance might propel ATOM to challenge resistance near $20.8, a jump of 32.3% from current levels.
Meanwhile, the relative strength index for the altcoin became overbought, with a value of 70.63 on the daily charts. RSI measures the magnitude of recent price changes to analyze overbought or oversold conditions.
Traders often consider overbought RSI values as a sell signal. If the RSI moved higher, ATOM prices might fall if traders start a selling spree. As a result, ATOM might fall to immediate support near $14.4. Further downtrend might see the token test support from its 20-day EMA (red wave) near $12.7.
Finally, a marketwide sell-off could result in ATOM falling 27% to $11.5 before recovering.
At writing, ATOMUSD was trading at $15.7, up 13.4% on the day.
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