ATOM has been one of many favourite cryptocurrencies for swing merchants since mid-June. It’s because it has been progressively recovering from its backside vary however in predictable worth swings between assist and resistance.
Nevertheless, ATOM’s upside is now threatened by resistance close to the $12.20 worth zone.
ATOM retested the identical resistance degree within the final two days, and every time was characterised by rejection.
This confirmed that there was vital promoting strain above $12. Apparently, ATOM encountered resistance inside the similar worth zone in Might.
It’s because it was inside the 0.236 Fibonacci retracement degree.
If ATOM manages a breakout above the 0.236 Fibonacci retracement degree, it might doubtless face resistance close to the $13 vary.
It’s because additional upside would push it in direction of its ascending resistance line.
Assessing breakout/retracement chances
Though ATOM can probably get away of the present resistance degree and even the subsequent, there may be additionally a chance of a large retracement.
Some on-chain metrics appear to be in favor of the latter. For instance, the Binance funding fee dropped considerably from its regular vary, indicating a decline in demand from the derivatives market.
The decrease investor demand additionally displays the comparatively low social quantity. This enforces the concept demand for ATOM at present worth ranges is diminishing.
The weighted sentiment metric additionally aligned with this view.
Furthermore, with a press time determine of -0.231, the weighted sentiment metric confirmed that the general market sentiment was progressively shifting in favor of the draw back.
Though the weighted sentiment is down drastically for the reason that begin of Might, it’s close to the impartial line.
A considerable pullback would doubtless set off a cascading impact as extra buyers undertake a unfavorable sentiment.
What ought to buyers anticipate?
ATOM’s present outlook based mostly on technical indicators and on-chain metrics suggests that’s due for a short-term retracement.
Nevertheless, buyers ought to word that the general market circumstances at present favor a mid-term rally. This implies the potential draw back is likely to be restricted.
The crypto market has been experiencing a interval of calm after turmoil and uncertainty in Might and June.
Even so, buyers ought to nonetheless be careful for risky worth actions and surprising occasions which may sway costs.