Cosmos (ATOM) Price Analysis: Wedge Pattern Hints at Temporary Peak, But Bulls Eye $7.14 Target

Riding the broader bullish momentum in the market,  Cosmos [ATOM] surged by nearly 65% in just two weeks. The altcoin saw massive gains, pushing above the critical 200-day EMA to affirm a bullish outlook.

output: As the broader crypto market continues its bullish momentum, Cosmos (ATOM) has seen a significant surge in its price. Here's a closer look at ATOM's recent price action and what traders can expect next.

Rising wedge pattern and EMA support

After surging by nearly 65% in just two weeks, ATOM's price action formed a rising wedge pattern, indicating building buying pressure. However, this pattern also signals that the rally might be nearing a temporary peak.

Recent price action and EMA overview. Source: TradingView

At press time, ATOM's price was at $6.18, facing resistance at $6.59 and showing signs of slowing down from the upper boundary of the rising wedge.

The 20-day EMA at $5.33 and 50-day EMA at $4.92 provided crucial support during the rally, which also saw ATOM trading above the 200-day EMA at $5.88, signaling a potential long-term trend reversal in favor of the bulls.

If buyers manage to break through the current pattern and achieve a daily close above $6.59, it could open the door to further gains. It's worth noting that the next major resistance is at $7.14.

However, a break below the current wedge pattern could invalidate this short-term bullish bias, with potential support coming into play around the EMAs and the $5.33 level.

MACD, RSI and trading volume

The MACD witnessed a bullish crossover, with the MACD line above the Signal line in positive territory. This highlights continued buying pressure. Also, the RSI stood at 64 after reversing from the overbought territory.

This level suggests that buying pressure is still dominant, but it also leaves the door open for a potential correction if bulls fail to drive prices above the current resistance level.

Should it fall below the 200-day EMA, ATOM’s immediate support lies in the $4.9-$5.3 range. On the upside, the altcoin faces immediate resistance at $6.59, which coincides with the rising wedge’s upper boundary. A successful close above this level could pave the way toward the next resistance at $7.14.

Derivative data revealed this

Trading volume dropped by 34.55% over the last 24 hours, reflecting cautious participation from traders. Additionally, Open Interest decreased by 4.14%, indicating that some traders closed their positions amid the recent volatility, possibly to secure gains.

The long/short ratio stood at 0.932, indicating a relatively balanced market sentiment with a slight inclination toward short positions.

Read Cosmos’ [ATOM] Price Prediction 2024-25

However, the data from Binance and OKX depicted a more optimistic picture, with the long/short ratios for ATOM/USDT standing at 3.288 and 2.94, respectively, suggesting that traders on these platforms anticipate a continued rally.

Traders should also closely watch Bitcoin’s price action, as broader market sentiment will likely influence ATOM's next move.