- Cosmos (ATOM) is challenging the resistance of a descending channel, signaling the potential for breakout.
- Key support holds firm, while RSI and volume suggest increasing bullish momentum.
- Targets of $5.00, $6.40, and $7.75 hinge on whether ATOM clears its overhead barrier.
Cosmos (ATOM) is back in the spotlight as it probes the top boundary of a downtrend channel on its daily chart. Posted on April 23 by chart analyst Jonathan Carter, the setup shows ATOM’s battle with an established bear framework.
The downtrending channel encompasses the coin’s multi-week downtrend, whereby price action has been contained within declining lines of resistance and support.
Trading now just above a historical support area, Cosmos (ATOM) is gradually closing in on the channel’s resistance. Spiking volume at this level indicates increasing interest, with bulls trying to turn sentiment.
The importance cannot be overemphasized, this is where trend changes usually start. Carter refers to this convergence as a make or break scenario, one that will turn the asset into a short-term bull trend should buying continue to gain steam.
The RSI is in neutral territory, not overbought or oversold, reflecting balanced market conditions. The slight upward slope enhances weightage to the breakout theory. The interplay between RSI and volume at key price junctures provides vital information: momentum is on the rise and bulls are gearing up for a test.
Price Targets and Breakout Potential
Jonathan Carter details possible targets for a breakout: $5.00, $6.40, and $7.75. Each is based on historical price action. The $5.00 mark is a first breakout confirmation level, typically the first barrier past resistance breakdowns.
Further than that, $6.40 and $7.75 stand as more ambitious targets, perhaps corresponding to Fibonacci extensions or past congestion areas.
Carter’s breakdown, rooted solidly in structure, highlights that these aren’t arbitrary numbers, these are levels that reflect stacked market responses.
If Cosmos (ATOM) breaks above the resistance line on increasing volume, then these levels can be reached sooner than anticipated, particularly within an environment where a wider crypto rebound is taking shape.
Yet, rejection at resistance is still on the cards. In such a scenario, a move back towards the lower channel band and perhaps a retest of the $3.50 area is possible. The only difference here is that support is being honored, and sellers seem to be weakening, opening a rare window of opportunity for bulls.
Altseason Upside Could Drive Cosmos (ATOM) Toward $100
A wider perspective is offered by Vuori Trading, who uploaded an independent weekly chart. He presents a double bottom formation, a strong reversal signal, at the very bottom of same downtrending channel.
He adds a further bullish narrative by referencing a bullish divergence in RSI, where price created a lower low, while momentum created a higher low.
This setup on the indicators suggests that this longer-term downtrend may finally be running out. Vuori’s price projection is much farther out than Carter’s near-future goals. He sees a W-recovery that will take Cosmos (ATOM) to the low $20s and perhaps, during an altseason, to $100.
