ATOM has been one of many favourite cryptocurrencies for swing merchants since mid-June. It is because it has been regularly recovering from its backside vary however in predictable worth swings between help 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 stress above $12. Apparently, ATOM encountered resistance throughout the identical worth zone in Could.
It is because it was throughout the 0.236 Fibonacci retracement degree.
If ATOM manages a breakout above the 0.236 Fibonacci retracement degree, it could seemingly face resistance close to the $13 vary.
It is because additional upside would push it in the direction of its ascending resistance line.
Assessing breakout/retracement possibilities
Though ATOM can probably get away of the present resistance degree and even the following, there’s additionally a chance of a large retracement.
Some on-chain metrics appear to be in favor of the latter. For instance, the Binance funding charge 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 regularly shifting in favor of the draw back.
Though the weighted sentiment is down drastically for the reason that begin of Could, it’s close to the impartial line.
A considerable pullback would seemingly set off a cascading impact as extra traders undertake a destructive sentiment.
What ought to traders count on?
ATOM’s present outlook based mostly on technical indicators and on-chain metrics suggests that’s due for a short-term retracement.
Nevertheless, traders ought to be aware that the general market circumstances at present favor a mid-term rally. This implies the potential draw back could be restricted.
The crypto market has been experiencing a interval of calm after turmoil and uncertainty in Could and June.
Even so, traders ought to nonetheless be careful for unstable worth actions and surprising occasions that may sway costs.