cosmos [ATOM] Short traders can win if BTC trades at this level

Disclaimer: The information presented does not constitute financial, investment, trading or any other type of advice and solely represents the opinion of the author

• ATOM was in a price correction that could extend to $9.661.
• A move above $10.221 would invalidate the bearish forecast.

cosmos [ATOM] rallied from mid-December 2022 to early January 2023, rising from $8.5 to around $10. It offered investors over 20% gains in the same term.

read Cosmos’ [ATOM] price prediction 2023-24

However, the king coin Bitcoin [BTC], turned bearish, forcing most altcoins into a correction. ATOM fell below $10.038 just after BTC fell below $16.81K. At press time, ATOM was trading at $9.955 and technical indicators were pointing to further downside.

ATOM in Free Fall: Are the Bulls Finding Steady Support?

Source: ATOM/USDT on TradingView

On the 12-hour chart, the Relative Strength Index (RSI) had entered the overbought territory and is pulling back. Similarly, the Money Flow Index (MFI) had peaked in accumulation and some distribution had taken place.

Additionally, On Balance Volume (OBV) declined, amplifying the decline in trading volume and limiting buying pressure. The conditions for the following course reversal were therefore ripe. However, given the slump in OBV, the correction could widen.

If selling pressure intensifies, ATOM could drop below $9.951 or the 100-period EMA at $9.933. It might find new support at $9.825 or $9.661. Short sellers can use these levels as short selling targets.

However, a break above $10.221 would invalidate the above bearish bias, especially if BTC remains bullish. Therefore, investors should monitor BTC movements and any rejection of the RSI, especially in the mid-50s.

Cosmos saw a drop in trading volume and investor confidence

Source: Santiment

According to Santiment, ATOM’s development activity declined until the end of December 2022, reaching its nadir on December 31. However, it has gradually risen since January 1, boosting investor confidence as evidenced by improved sentiment over the same period.

However, weighted sentiment retreated towards neutral levels as prices fell as trading volume fell. At press time, development activity remained high, yet ATOM’s prices were falling lower.

how You can get many ATOMs for $1?

Still, demand in the derivatives market increased, as evidenced by the increase in the Binance Funding rate for the ATOM/USDT pair.

Although the surge in demand in the derivatives market could likely influence a price change, investors should monitor any surge in volume and bullish BTC to confirm a trend reversal.

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