Cosmos (ATOM) price has broken out of a diagonal resistance level and it could be in the early stages of a larger bullish move.
ATOM price has been rising since April 12 and finally broke out of the resistance line for more than two months. It is now trading at the top of its short term pattern. Is there more momentum in ATOM?
ATOM price has been falling below the descending resistance line since February 8th. And while doing so, it bounced several times at the confluence of support levels at $11.07. The support consists of a horizontal support area and the 0.618 Fibonacci retracement support level.
Fibonacci retracement levels act as a set of horizontal lines derived from the Fibonacci sequence, which indicate areas where support and resistance may be encountered. Combined with the horizontal support area, this greatly increases the importance of the level.
After the last bounce on April 12, ATOM broke off the streak three days later. Breakouts from these structures usually indicate the completion of a correction.
The main indicators are flash bullish
Moreover, the daily Relative Strength Index (RSI) has moved above the 50 level (green symbol). The RSI is a tool that helps traders understand whether an asset is overvalued or undervalued by measuring how quickly its price is changing. It measures momentum, and moves above 50 are a sign that buyers are in control.
Furthermore, the RSI looks at how fast and how much the price has moved recently to determine whether it is time to buy or sell the asset.
As a result, the readings from the daily time frame are bullish. The nearest resistance area is at the average price of $13.20, and a break above it could send ATOM up.
ATOM Price Prediction: $14 on the horizon
The short-term technical analysis for six hours supports the possibility of ATOM price breaching from the $13.20 resistance area.
The main reason for this is that the price has moved above the middle of the parallel ascending channel during the past 24 hours. The ascending parallel channel is a corrective pattern that indicates the possibility of a final breakdown from it.
However, the resistance line is expected to be touched several times. Since the price moved above the center line (green circle) and an increase towards the resistance line at $14 is expected.
After that, whether the ATOM token breaks or is rejected is likely to determine the future direction. A breakout could take the price to $15, while rejection is likely to cause a drop to the channel support line at $11 and possibly cause a breakdown.
In conclusion, the most likely ATOM price prediction is an increase towards $14. A drop below the center line of the current channel will invalidate the bullish Cosmos price forecast. In this case, a drop to $11.20 would be the likely outcome.
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In line with Trust Project guidelines, this price analysis article is for informational purposes only and should not be considered financial or investment advice. BeInCrypto is committed to accurate and unbiased reporting, but market conditions are subject to change without notice. Always do your own research and consult with a professional before making any financial decisions.