Cosmos (ATOM) has seen a strong comeback by the bulls in recent sessions, with a 15% increase in price. Despite the recent recovery, there is still concern among investors about another selloff, as the long-term trend remains bearish. However, there are positive signs in the on-chain data, suggesting that the recovery may continue.
Analysts have noted a significant improvement in an important on-chain metric called weighted sentiment. The positive sentiment has grown rapidly, and the weighted sentiment curve has shifted to positive territory. This indicates a continuation of the recovery and suggests that ATOM may have the potential to generate impressive returns in the short term.
From a technical standpoint, ATOM’s price is headed for a recovery after a sharp crash. The next hurdle lies near $5.7, which has become a resistance level. This level is important because it is the golden zone of Fibonacci retracement tools. A breach of this level could lead to a bullish reversal. However, if the recovery loses steam near the 50% retracement zone, it may present a sell-on-rise opportunity for bears.
The Relative Strength Index (RSI) line has recovered from oversold territory and is at 40.30 points, indicating a potential price recovery. Additionally, there has been a bullish crossover between the 14-day Simple Moving Average (SMA) line and the RSI line, further supporting a price recovery outlook.