In this new Crypto Nugget for Wednesday, we bring you an analysis of ATOM that will allow us to review ours previous asset analysis. In early June, momentum started building again in the markets. Today the goal is to determine the key scenarios and in which cases we may have a fairly bullish or bearish bias for ATOM. Without further ado, let’s jump right into TradingView.
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A great jump without breaking free from resistance
In this chart I use a specific scale where each candle corresponds to 3 days of fluctuation. This allows for a scale halfway between daily and weekly time units. You can see that after the bounce to $5.50, ATOM broke out of the first key level (blue area). A real turnaround for the asset, it formed support before returning to resistance at $12.36. This level prevents ATOM from pushing May higher.
Therefore, we either have a price consolidation before the breakout to the upside or else we are looking for short liquidity before moving down again towards the pivot zone. To see ATOM at higher price levels, it will need to clear the mouth of the EMA it is currently struggling with, as well as the resistance at $12.36. If ATOM manages to regain bullish momentum, then we can set a bullish target at $17.24.
It’s double or nothing for ATOM
In the daily time unit, ATOM has been in an upward trend since mid-July. He has never lost a match of three EMAs (13,25,32). In the past few days, he made a false bearish breakout as he briefly lost this mouth only to regain it later. Losing the confluence of the EMA and HVN volume profiles with returns below $10.72, ATOM is likely to enter a downtrend. In this context, we will have in the viewfinder the POC (red line) in conjunction with the identified pivot zone (blue rectangle). In addition to this technical confluence at $9/9.30, we have the MA100 which is (currently) at $9.52.
However, if Ethereum and Bitcoin continue their bullish momentum towards their previous highs, this would be a favorable backdrop for ATOM’s upward pressure. So, by holding above the EMA confluence and lifting $12.36, we can establish an intermediate target ahead of $17.24. This lens is on the EMA200. Having made a projection of its momentum, we can expect a reaction to $15.
Very strong advantage over bitcoin
Faced with the king of cryptocurrencies, it is clear that ATOM is relatively solid and has managed to hold its own against BTC for several weeks. It recently broke free from the pivot zone represented in blue. Yesterday it compressed between the EMA200 (black dotted line) and resistance at 5519 satoshis to overcome it. The challenge now is to maintain this level and the EMAs lying just below it as dynamic support. Maybe we can lower the price a bit between MA100 (blue) and 5519 satoshis before going up again? If so, ATOM could return to the red zone identified on the chart.
However, it is important to be prepared for the opposite, i.e. a reversal of the trend in relation to Bitcoin and a return to poor performance. In what case can we adopt a bearish bias? It’s simple, if ATOM fails to hold above its blue zone and loses the EMA confluence, we will likely see the asset return to 4049 satoshis. This level could bring the first price reaction.
Here we are at the end of this analysis of ATOM. You understand that currently the ATOM continues its compression under resistance. Probably awaiting direction from Ethereum and Bitcoin. Moreover, I invite you to follow the situation of ATOM in relation to the king of cryptocurrencies. The chart could warn us of a continuation of the advance or an upcoming reversal of the trend. Depending on the pair’s momentum, this may confirm the bias we will take against the dollar. Indeed, the asset outperforming bitcoin is less easy to short in the event that bitcoin ranges or continues its bullish momentum. Therefore, monitor the key levels mentioned in the article and the situation of the price in relation to the moving averages.
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