Stable collapse above ATOM price support remains a concern

Cosmos (ATOM) price is trading inside the Fibonacci and horizontal support levels. There are no conclusive signs in either direction.

ATOM is the native token of the Cosmos ecosystem. ATOM price has declined since reaching an all-time high of $44.65 in September 2021. It made a lower high in January 2022 before accelerating the rate of decline. So far, Cosmos has fallen to the lowest price of $5.55 in June 2022.

The price of Cosmos subsequently began a boom that continues to this day.

Retaking the long-term $8.80 horizontal support area is a significant development. This area has acted as resistance and support intermittently since July 2020 (red and green icons). So, the June breakdown (red circle) is just a divergence due to a subsequent correction.

ATOM price is trading above the $8.80 support area while the weekly RSI is below 50. Therefore, whether the price breaks or bounces will determine the future ATOM price forecast.

Cosmos (ATOM) Loses Price Growth Momentum

The daily time frame is showing two other important resistance and support levels. First, ATOM price has followed a descending resistance line since September 9th. Line rejected ATOM on 5 November.

Later, the price declined to the 0.618 Fibonacci retracement support at $10. This is both the 0.618 Fibonacci retracement support level and the horizontal support area.

However, the daily RSI is bearish as it is below 50. As a result, whether ATOM price breaks the $10 area or bounces will determine the future trend.

Wave count supports bounce?

Wave count favors the possibility of a bounce. This shows that ATOM price has completed an ABC corrective formation.

The fact that the waves have a roughly 1:1 ratio and the overlap of waves A and C (red line) supports this to be a correct calculation.

However, the count will be invalidated with a decisive close below the $10 support area. In any case, the wave count only suggests that a short-term uptrend will follow, rather than a long-term bullish reversal. As a result, the direction of the long-term trend is unclear.

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