Cosmos price could fall 15% before ATOM bulls have a chance at pre-lawsuit levels
- Cosmos price fell nearly 30% after the SEC labeled ATOM a security alongside nine other cryptocurrencies listed on Binance.
- Bullish effort has seen the altcoin bounce 25%, but more needs to be done for a chance at pre-lawsuit levels.
- ATOM could fall 15% to garner strength for a retest of June 7 highs around $10.80.
- A daily candlestick close above the $10.80 resistance level would invalidate the bearish thesis.
Cosmos (ATOM) price was brutally affected when the US Securities and Exchange Commission (SEC) labeled the altcoin a security, among nine other tokens, in the Binance Exchange lawsuit. Like the rest of the altcoins in that cohort, ATOM's market value slumped as investors engaged in panic-selling. Despite the bullish effort to recover the lost ground, more needs to be done in terms of momentum before realizing the target.
Cosmos price forecast as ATOM bulls target June 7 highs
Cosmos (ATOM) price is down 30% since June 7, when the SEC filed a case against Binance, citing trading unregistered securities. After naming ATOM among the ill-fully traded assets, panic selling commenced, sending listed tokens down.
It has been a crazy week in Crypto, from Coinbase & Binance getting sued to SEC declaring $ATOM security
— Ryan ⚛ (@ryanleads) June 11, 2023
But that’s not all, here are some exciting events in the Cosmos ecosystem in the past few days
Let’s dive in ⤵️ pic.twitter.com/p8y8zmTO9n
This came as November 2022 memories still ran fresh when regulator attack on FTX exchange saw the platform collapse with user funds locked in.
While bulls have executed a 25% climb to rescue ATOM from the June 10 dip of $7.01, Cosmos price remains in the thicket as it continues to consolidate within a bearish descending channel. Nevertheless, the June 10 candlestick that temporarily broke below the bottom of the technical formation is probably an 'exhaustion bar' marking the end of the downtrend.
In the coming days, Cosmos price could rise within the channel to tag the midline of the channel at around $9.40 or the 50-day Exponential Moving Average (EMA) at $10.18 at best before a correction.
The Relative Strength Index (RSI) recently exited oversold which is a bullish signal for traders to close short positions and buy longs. The short-term bullish outlook is reinforced by the Awesome Oscillators (AO) histograms turning green and drawing to the midline.
Nevertheless, the price strength indicated by the RSI below 50 shows that ATOM bulls require more momentum to test the June 7 highs of around $10.80. This means the correction could happen before the altcoin touches the midline for Cosmos price to collect sell-side liquidity right below the $8.02 support level.
ATOM/USDT 1-Day Chart
A decisive break above the resistance confluence between the horizontal line and the 100-day EMA at around $10.80 could invalidate chances of a pullback, clearing the way for Cosmos price to tag the 200-day EMA at $11.44.
In a highly bullish case, the altcoin could extend a neck higher to breach the March 17 high of around $13.16.
Author
Lockridge Okoth
FXStreet
Lockridge is a believer in the transformative power of crypto and the blockchain industry.
