The Cosmos (ATOM) cryptocurrency has recently started to reverse its downtrend, approaching a significant resistance line.
Cosmos is an ecosystem of decentralized and scalable blockchains that aims to create an “Internet of Blockchains” where users can interact in a decentralized manner.
The native token of the project is called ATOM, and holders can stake or delegate it to validators to earn additional profits.
Technical analysis of the weekly chart shows that the ATOM price’s prospects are uncertain. In September 2021, it reached an all-time high of $46.68 and has been decreasing since then, hitting a low of $5.54 in June 2022.
However, the price started to recover in December of the same year and turned the $9 area into support, indicating a potential bullish reversal.
Nevertheless, the weekly RSI has not confirmed this bullish trend, and the price must break through the bearish divergence trendline to confirm it.
If the price continues to rise, it will face resistance at around $21.30, where the 0.382 Fibonacci retracement level and the horizontal resistance area converge. This level has not been visited since February 2022.
The daily chart’s wave analysis shows a bullish scenario where the correction A-B-C has been completed, and the price is now testing the $10.30 area’s strength as support.
Moreover, the daily RSI has made a bullish breakout of the bearish divergence trendline, which is a positive signal that could precede a significant price increase.
Therefore, the most likely scenario for Cosmos is an increase towards the resistance at $14.30, and possibly towards $16.80.
However, if the price falls below $10.30, it may reverse this bullish trend and drop to the nearest support at $8.80.