Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.
- ATOM’s second leg of recovery faltered after BTC’s pullback.
- Bearish sentiment increased in the futures market.
Cosmos [ATOM] short-sellers grabbed shorting opportunities following Bitcoin’s [BTC] pullback. The king coin slid to the $30k zone after hitting a new 2023 high of $31.4k on 23 June.
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ATOM took a cue from BTC and reversed some of the recent gains, making a $10 psychological level cross a delayed objective for bulls.
However, BTC hasn’t lost hold of the $30k zone as of press time, meaning the bullish sentiment still prevails, and the short-term pullback may not morph into a downtrend.
Are sellers eyeing $8.98?
Source: ATOM/USDT on TradingView
The first leg of ATOM’s recovery, from 10 June, entered a narrow price consolidation range of $8.44 – $8.98. The second leg of the rally started around 20 June and smashed the range high of $8.98, only to falter at the previous lower high of $9.63 – slightly below the $10 psychological level.
Sellers gained entry at the $9.63 roadblock and targeted gains at the previous range-high of $8.93. The target also aligns with the 50% Fib and the retracement could ease at $8.93 if BTC doesn’t drop below $30k.
However, the RSI has eased at the 50-median mark and hasn’t dropped below the neutral level in the past few days. Also, the CMF (Chaikin Money Flow) was above the zero mark, meaning capital inflows remained stable.
Collectively, the indicators point to a possible rebound at $8.93. It can also happen sooner without touching the $8.93 if BTC recovers strongly from the pullback, entrapping sellers into a bear trap. The immediate targets will be $9.63 and $10.0 for bulls.
A bearish grip; a wavering open interest rates
Source: Coinglass
According to Coinglass, ATOM’s open interest rates have been wavering since the second half of June. This could limit a strong bounce above $9.5 or $10, as it denoted wavering demand in the futures market.
How much are 1,10,100 ATOMs worth today?
Besides, more traders were shorting the asset on the futures market in the 4-hour timeframe. Although this paints a bearish short-term outlook, a strong BTC rebound before ATOM hits the short-term support of $8.93 could wreck many short positions.
A rebound from $8.93 or a pullback retest on $9.63 could offer new buying opportunities, provided BTC remains bullish.
