Interoperability layer Cosmos [ATOM] fronted a 15% jump on Thursday, thanks to a broader market rebound. The surge followed Bitcoin’s attempt to climb above $64K.
The lift off extended ATOM’s June recovery gains to 30%. But the rally has hit a key inflection point that sets a springboard for further upside momentum or likely sell-off.
Cosmos: Which way for ATOM bulls?
On the price charts, ATOM has been oscillating between $1.6 and $2.5 since February. In fact, the $1.66 is a February low that has acted as a key support in the past few months. The latest June recovery was triggered from this level, further reinforcing it as a key demand zone.
Notably, the $2 price area has acted as support and resistance, too. Worth pointing out that the current rally has hit the 200-day SMA (Simple Moving Average, blue), which also aligned with the $2 price level.
A decisive reclaim above the 200-day SMA would effectively flip the market structure bullish and improve the chance of extending the recovery towards $2.3 or $2.5.
But should bulls falter at the 200-day SMA, short sellers could drag ATOM to $1.8 or back to the range-low of $1.66.
So, ATOM’s uptrend could extend if it stays above $2 and the 200-day SMA, alongside strong buying pressure with RSI above the neutral level.
The only caveat is that SpaceX’s IPO will debut today and could siphon the capital from the crypto market in the short term. If so, any extra BTC losses would compound ATOM’s weakness and could likely drag the altcoin down below $2.
Cosmos: Can ATOM stay above $2?
From a liquidation heatmap perspective, a volatility-driven market could push ATOM slightly higher to $2.1 before a potential drop to $1.9 or $1.7.
The above assumption was based on the upside liquidity of leveraged shorts that was piled above the $2 level. Past this zone, there was no meaningful liquidity.
In other words, after a potential short squeeze above $2, the lower liquidity pools at $1.9 and $1.7 could be the next target. Especially, if the SpaceX IPO debuts drag the crypto market lower.
In fact, the above data reinforced the price chart reading that the $2 could be a key roadblock if selling pressure intensifies.
The above bearish stance could be invalidated if the $2 level and the 200-day SMA are decisively defended as support. In such a scenario, another 25% potential could be possible for ATOM bulls.
Final Summary
- ATOM rallied 15% and hit $2 on Thursday, bringing its January recovery gains to 30%.
- However, the $2 could become a make-or-break point ahead of SpaceX’s IPO.
