Cosmos Technical Analysis: ATOM/USD potential pennant pattern breakout eyes $6.50

Cosmos was not spared by the bearish wave that swept across the market since August 13 following the majestic advancement to highs around $6.50. The price started to narrow downward within a bullish pennant pattern due to the selling pressure at $6.50. Support seems to have been established at $5.50 after a lower dip to $5.30.

Meanwhile, ATOM is trading at $5.74 amid a building bullish momentum from the support at $5.50. The momentum is supported by the RSI as it scales the levels past the midline. If the uptrend holds towards the overbought, we can expect Cosmos to easily overcome the next hurdles at $6.00 and $6.50.

The formation of a bullish pennant pattern could bring into the picture a massive breakout above the psychological $6.50 resistance. Moreover, trading above the 50 SMA in the 2-hour range is likely to give the leg up a boost as more buyers become confident in the recovery.

At the moment, ATOM is in the hands of the bulls. Besides, the Elliot Wave Oscillator is printing a bullish session to highlight the growing bullish grip. On the downside, if a reversal occurs from the prevailing price level, support can be expected at $5.50, the 100 SMA at $5.1835 $5.00 and $4.00 in that order.

ATOM/USD 2-hour chart