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Cosmos (ATOM) experienced a strong recovery from the $6.2 price zone in September, but it halted at the $7.5 price level. Previously, bulls had made a solid recovery with gains of 18% between September 12th and September 19th.
Impact of Decline in ATOM!
However, the inability of buyers to surpass the $7.5 price level and the downtrend structure of ATOM in higher time frames brought sellers back into the market. This resulted in a 7% decrease as buyers took a breather at the nearby $7 support level.
The 12-hour time frame showed a short-term uptrend that ATOM buyers enjoyed. This was reflected in the rising relative strength index (RSI) towards the upper range. Despite the uptrend, the on-balance volume (OBV) continued its downward trend, which was a negative sign for bulls. As volume decreased, bears gained an advantage in stopping the rally.
The continuation of the uptrend rally may depend on buyers defending the $7 support level, as indicated by the RSI returning to the lower range and the OBV dropping below 3 million. A successful defense in the altcoin could see bulls push for the $7.5 price level again. On the contrary, a break below the $7 support could lead to a prolonged drop towards $6.5.
Bitcoin Impact on ATOM!
In addition, market speculators adopted a cautious approach following the price decline in ATOM. Open interest (OI) was on an upward trend between September 11th and September 20th, but experienced a sharp drop on September 21st.
This suggests a decrease in positions by speculators with expectations of further decline. The cautious approach also spread to funding rates, which fluctuated between positive and negative in the 12-hour time frame. Overall, investors need to closely monitor the price movement of Bitcoin (BTC) in the short term.
The upward or downward trend of the leading cryptocurrency can affect the price of ATOM in the meantime. As a result, while Cosmos (ATOM) experienced a 7% decrease by failing to surpass the $7.5 resistance level and defending the $7 support level becomes critical, OBV and speculator positions emerge as factors to be considered in the market.