Disclaimer: The information presented does not constitute financial, investment, trading or other advice and is solely the opinion of the author.
- ATOM’s second recovery period faltered after BTC’s pullback.
- Bearish sentiment increased in the futures market.
Cosmos [ATOM] short sellers then seized short opportunities Bitcoins [BTC] pull back. The king coin slid into the $30,000 zone after hitting a new 2023 high of $31.4,000 on June 23.
Is your wallet green? look at the ATOM Profit Calculator
ATOM followed a signal from BTC and reversed some of its recent gains, pushing a psychological level of $10 above a delayed target for bulls.
However, BTC has not lost the $30,000 zone at the time of writing, meaning that bullish sentiment still prevails and the pullback may not turn into a downtrend in the near term.
Are sellers looking at $8.98?
Source: ATOM/USDT on TradingView
The first leg of ATOM’s recovery, from June 10, came in a narrow price consolidation range of $8.44 – $8.98. The second leg of the rally started around June 20, breaking the high of $8.98, only to falter at the previous low of $9.63 – slightly below the psychological level of $10.
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 narrow to $8.93 if BTC does not drop below $30,000.
However, the RSI has eased near the 50 median and has not fallen below the neutral level in recent days. Also, the CMF (Chaikin Money Flow) was above zero, meaning that capital inflows remained stable.
Collectively, the indicators point to a possible $8.93 recovery. It may also happen sooner without touching $8.93 if BTC rallies strongly from the pullback, trapping sellers in a bear trap. The immediate targets are $9.63 and $10.0 for bulls.
A bearish hold; a wavering open interest rates
Source: Coinglass
According to Coinglass, ATOM open interest rates have been faltering since the second half of June. This could limit a strong rebound above $9.5 or $10, as it indicated hesitant demand in the futures market.
How many Worth 1,10,100 ATOMS today?
Besides, more traders shorted the asset in the futures market in the 4-hour time frame. While this paints a bearish short-term outlook, a strong recovery in BTC before ATOM reaches the $8.93 short-term support could devastate many short positions.
A $8.93 rebound or a pullback retest at $9.63 could present new buying opportunities, provided BTC remains bullish.
