Cosmos (ATOM) – Exposed to further deterioration in the short-term

Cosmos (ATOM) – Exposed to further deterioration in the short-term

Since the 5^th of November, Cosmos (ATOM) has been falling without a parachute, losing around 40% of its value. Following a minor recovery last Friday, bears re-emerged near the 20-period simple moving average to contest the most recent intraday support, while aiming to stretch the current descent.

The technical indicators are presently favoring such a bearish scenario. The ROC is sloping southwards below the zero mark, and the -DI and +DI lines of the ADX indicator are diverging and bearishly aligned, with the indicator itself surging way above 20. Moreover, the 20- and 40- period simple moving averages are plummeting along the price action, promoting further bearish developments.

Hence, a decisive drop below the lower Bollinger band and more importantly the November 9^th bottom of 9.37, will activate a steep bearish wave towards the 161.8% Fibonacci extension level of the last up-leg at 7.44. Another collapse here will likely see the price plunging directly to the 261.8% Fibonacci level at 4.31.

Alternatively, if the bulls manage to bounce off the aforementioned intraday bottom, they may attempt to pilot higher toward the 20- and 40-period simple moving averages. A significant move above these lines would bring the November 10^th top at 12.50 into scope, near which the upper-Bollinger band is residing. Higher, the rally could pick up steam towards the October 31^st high at 14.52.

In brief, Cosmos is exhibiting a sturdy bearish outlook in the short-term window, and a drop below 9.37 will further boost selling interest. For sentiment to change, buyers would need to surge above the simple moving averages and the 12.50 high.