The recent weekly bounce has put ATOM back in an upward range as it posts a major gain in the last 24 hours. Gaining a lot of traction daily, it signals a bullish move with an inverse head-and-shoulder pattern.
ATOM’s price is still captured in a bearish zone from a short-term scale, but the trading landscape is slowly changing following a recent rebound above the $4.15 level, serving as weekly support.
The bounce started last month after testing a year low of $3.4. As trading volume increased, the price recovered and broke out of a descending trendline, serving as resistance for over three months. It later marked resistance at the $5 level and ended the month on a weak note.
Pulling back to the broken resistance line for a retest, it quickly located support on Wednesday and bounced back. That triggered a sudden surge yesterday as volume flows back in the market. Currently, the price is on the cusp of breaking out the mentioned important resistance level.
Considering the break and retest pattern, ATOM’s trend looks set for a major shift from a technical perspective. A successful break above that resistance could activate a strong rally.
Another indicator to watch for a trend shift is the current inverse head-and-shoulder pattern forming on the daily chart. A surge above the neckline, should set the market up for a big recovery.
Source: Tradingview
However, a flip above $5.15 could skyrocket the price to $6.1. A further increase there should trigger a major rally to $7 and potentially $8.5.
Apart from the $4.15 level, marked as weekly low, the main support for the latest upsurge is pinned at $3.39. Below it lies $3 in case of a crash.
Key Resistance Levels: $5.15, $6.1, $7
Key Support Levels: $4.15, $3.39, $3
Disclosure: This is not trading or investment advice. Always do your research before buying any cryptocurrency or investing in any services.
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