Cosmos price entering accumulation phase, but ATOM could rally 30%

Cosmos (ATOM) price has tried and failed to break the upside cap, which is present as a red descending trendline. In the wake of that rejection, price action has taken a step back, and the Relative Strength Index (RSI) has been falling from being overbought to barely being oversold. Although bears might have thought they were doing good at defending the cap, it will soon come back under pressure as the RSI and Cosmos price is set to swing back up north again.

Cosmos price working the logic of what goes down, must come up

Cosmos price action has seen bulls burning their fingers with a bull trap at $13 when trying to break the red descending price cap on the topside. Cosmos price quickly retreated after the break as bears overhauled the bullish attempt to claw higher. What followed was a quick sell-off that got halted by the trifecta of the monthly pivot, the 200-day and 55-day Simple Moving Averages (SMA) in a joint cooperation.

ATOM bulls will have spotted as well that the RSI is near being oversold, and that opens up a lot of room without much resistance for bulls to the upside. With the fresh amount of bulls entering the price action, expect Cosmos to significantly pop higher, strong enough to break the bearish cap at $13. From there, it will be one line straight up to $15. 

ATOM/USD  4H-chart    

Bulls could still withstand another 6% of losses when Cosmos price slides a little bit more in order to test if the green ascending trendline is still there for support. Should the rally, however, prove to be no longer viable anymore, a break below that same green ascending trendline would activate a wave of sell orders. ATOM would spiral down and might implode 30% toward $8.50.