Cosmos (ATOM) has started to erase its gains from the past 30 days, with analyst Ali Martinez suggesting a potential correction down to $9 as the new year begins. Martinez’s analysis, using the Tom DeMark (TD) Sequence, indicates that the trend exhaustion and possible price reversal could be imminent, as the buyers who pushed ATOM to $12.25 on December 26 seem to have exited the market. At the time of writing, ATOM’s price was at $10.58, marking a 6.38% decline over the last week.
The article also highlighted the impressive network activity of Cosmos, despite a significant volume decrease. The current volume was reported at 129.8 million, a substantial drop from the 479.75 million recorded on December 26. This volume reduction is an indicator of the amount of investor activity within a cryptocurrency over a certain period, suggesting that buyers might be losing interest in ATOM.
From a technical perspective, the cryptocurrency’s momentum has continued to decline, as confirmed by the Moving Average Convergence Divergence (MACD), which stood at -0.020 at the time of writing. Negative values of this indicator signify increasing downward momentum, supporting Martinez’s prediction that ATOM could fall below $10. Another indicator, the Aroon, showed Aroon Down at 85.71% and Aroon Up at 7.14%, indicating that the downtrend could persist in the short term.
Despite the potential for a downturn, ATOM’s funding rate remained positive at 0.039%, indicating that investors were leaning bullish on price movements at the time of writing. This means more long positions are paying funding fees to short positions. However, high funding during a price decline is not a good entry signal, suggesting that investors on the sidelines should be cautious if the funding rate turns negative. Another opportunity could arise after a potential drop, when ATOM might bounce back.
