Cosmos (ATOM) – Confronting a strong resistance zonePosted on Thursday, January 5 2023 at 8:30 pm GMT+0000
Cosmos (ATOM) has been creeping higher in the previous three weeks and overstepped the 40-day exponential moving average, to confront the upper bar of the descending regression channel stretched from the September 9th top.
The coin however failed to decisively thrust above the channel on Wednesday, and printed a Gravestone Doji candlestick. That kind of candlestick usually appears during an upward movement, and it is a warning that the buyers may soon run out of fuel.
As regards the market trend, the price remains below the negatively charged 100- and 200-day exponential moving averages while the oscillators are suggesting that sellers may soon re-emerge. Although the MACD is improving above its signal line, the IMI and the stochastics reversed southward in their respective overbought zones, raising the odds for some weakness in the near term.
Hence, if the upper bar of the channel manages to hold firm, the bears could squeeze the price back beneath the 40-day exponential moving average at 9.74. If this turns out to be the case, the coin could dive to the important support belt of 8.71 – 8.44, molded by the November and December lows.
Otherwise, should the price sustain its recent positive drive and jump beyond the channel and more importantly above the 10.66 resistance taken from the late November peak, overlapping with the 100-day exponential moving average, it will likely rise to battle with the 200-day moving average seen at 12.27. Should the buyers claim victory, they will then target the November 2nd inside swing bottom of 13.03.
Overall, despite the recent price appreciation, Cosmos has yet to secure buying confidence. For that to happen, it will have to thrust beyond 10.66. That said, a downside reversal cannot be ruled out, given the importance of the resistance section under active testing, and as oscillators flashed overbought signals.