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The Cosmos ($ATOM) price broke down from an ascending support line, indicating that the upward movement in place for more than a month has ended.
$ATOM is the native token of the Cosmos ecosystem. The $ATOM price has increased since Dec. 16. The upward movement led to a high of $15.45 on Feb. 3, causing a breakout from a long-term descending resistance line.
Afterward, the $ATOM price fell but bounced at the descending resistance line (green icon), validating it as support.
A bearish divergence in the daily RSI (green line) preceded the entire downward movement. The divergence trend line is still intact. In order for the upward movement to continue, $ATOM has to break this trend line.
If that occurs, the $ATOM price will likely move above the $15.50 resistance and increase toward $20.
On the other hand, if the price falls below the descending resistance line, it could drop to the next support at $11.50.
Cosmos ($ATOM) Price Could Retrace Further
A look at the short-term six-hour price action shows that the Cosmos price broke down from an ascending support line. The breakdown likely marked the end of a five-wave upward movement (black). If so, the $ATOM token price is now in an A-B-C corrective structure.
Therefore, it will continue its B wave increase toward the ascending support line at $15 before falling and completing the correction. The most likely level for the correction to end would be between $11.13-$11.95, the 0.5-0.618 Fib retracement support levels. Afterward, the increase could continue.
A fall below the $8.43 low would invalidate the long-term bullish outlook and could send the $ATOM price toward $5. On the other hand, an increase above the Feb.2 high of $15.45 could send the Cosmos price toward $20.
To conclude, the Cosmos price is expected to increase toward $15 before falling and completing its correction between $11.12-$11.95. A breakout above $15.45 would negate this bearish forecast and could send the $ATOM price to $20.
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