Cosmos (ATOM), ranked 44th in the cryptocurrency market, has been experiencing a 3% loss in intraday trading, causing its market cap to slip to $1.795 billion. Despite the overall bearish trend in the market during the second quarter, ATOM continues to remain in the top 50 global crypto assets.
Interestingly, derivatives trading activity for Cosmos has seen a significant surge over the past 24 hours, according to a derivatives research website. The open interest for Cosmos has increased by 3% to reach $70.96 million, while the derivatives trading volume has surged by 6% to $112.90 million.
These increased derivative activities are aligned with the current downward trend of Cosmos, indicating a rise in bearish sentiment. This is further confirmed by the liquidation data, which shows a notable increase in long liquidations compared to shorts.
The price action outlook for Cosmos suggests a continued bearish trend that began in March 2024, following a swing high of $14.505. Since then, the asset has been steadily declining, resembling a breakdown of a bearish ascending wedge pattern. However, there are also indications of a potential bullish falling wedge pattern forming on the daily chart.
Considering the high bearish sentiment and the liquidation of long positions, there is a higher likelihood of further dips towards strong support levels at $4 and $3.5. If these support levels are breached, the downtrend could extend. On the flip side, if Cosmos finds substantial support and gains significant bullish interest, it could complete the falling wedge pattern and experience a breakout.
In terms of resistance levels, potential interruptions to ATOM’s upward movement could be present at $6 and $8.
Analyzing the indicators on Cosmos’ daily chart, there is a bearish trend, but there has been a minor shift with some buying activity detected. The RSI has surged above the 14-day simple moving average, indicating a potential buying signal. However, bears still have control as shown by the MACD’s bearish cross.
Overall, Cosmos (ATOM) derivatives activity has surged amidst the bearish trend in the market, and the price action outlook suggests the potential for further downward movement, but with the possibility of a bullish breakout if the falling wedge pattern completes successfully.