Cosmos price  almost halfway from paring back losses from FTX meltdown

Cosmos (ATOM) price action has undergone a sharp correction of almost 35% since Tuesday. Titles like the Texas Chainsaw Massacre, IT or Terrifier 2 come to mind if the meltdown needs to be compared with a movie genre. It also fits the price action as traders were not surgical but simply chopping and axing their positions out the door.

ATOM price action sees vultures picking up the pieces

Cosmos price action currently paints a whole other picture, almost 180 degrees different from the narrative on Tuesday and Wednesday. As the deal between Binance and FTX has been blown out of the water, due to Binance walking away, it is just a matter of time before FTX finds another financial backer or files for Chapter 11 bankruptcy. Awaiting repercussions and possible crackdowns by the FBI or SEC against FTX , cryptocurrencies are recovering across the board and are nearing important levels.

ATOM price action is near $11.75 as the 200-day Simple Moving Average crosses the monthly S1 support level around that area. It will be key to watch if bulls can push beyond this level and even go for a daily close. That would mean that the recovery is well supported, and on Friday the 55-day Simple Moving Average is up next for the taking, possibly closing this week unchanged.

ATOM/USD daily chart

Going back to that aforementioned level near $11.75, risk looms of a firm rejection. Bears will be lined up to gladly fast Cosmos price action again on that level, with their stops placed safely further up. That selling pressure could easily push price action into the ground and test $9.29, the low of Wednesday, before looking to test $7.82 to the downside by Friday.