Cosmos: Why a jump to USD 7.5 is possible amid strong bearish outlook

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

• Cosmos is facing significant bearish pressure and is headed for further losses on the price chart.
• Liquidity in the north allowed prices to briefly pull higher.

Cosmos [ATOM] Bulls have struggled to defend critical support levels on the price chart over the past month. The downward trend has not stalled and the sellers have not deviated from the wheel. If this selling pressure continues, ATOM could drop towards the upper USD 6.9 support level, or even lower.

Read Cosmos’ [ATOM] Price Forecast 2023-24

Cosmos has a solid bearish view on the price chart across multiple time frames, and traders may want to watch for short positions in the coming days. North of ATOM, a liquidity position was highlighted. Will we see an uptick to put this zone to the test?

ATOM bulls hold on to the $7.1 support level, but for how much longer?

Source: ATOM/USDT on TradingView

Cosmos has a bearish order block on the 12-hour chart at $7.8. On the higher time frames, such as 12 hours and 1 day, the price action had a bearish structure with a series of lower highs and lower lows. This was also the case on the 2-hour chart.

To break the bearish structure, ATOM would need to climb above the recent lower high at $7.27. However, there is a little bit of liquidity in the $7.5 zone, which coincides with a bearish order block on the 2-hour chart.

Therefore, a return to this zone would likely provide a short position. On the other hand, structure and momentum dictated that continued losses were likely. The RSI stood at 42, showing weak bearish momentum. The OBV has been on a downtrend for the past week, indicating bearish dominance.

Realistic or not, here is ATOM’s market cap in BTC terms

The rising Open Interest showed some persuasion from bidders

Source: Coinalysis

On August 27, Open Interest jumped from $62.9 million to $65.7 million, even though ATOM prices saw only a minor rebound from $7.1 to $7.2. This showed that speculators were eager to bid. During that time, however, the spot CVD slid down.

So there was no real demand for ATOM, but this has changed in the last 24 hours. Spot buying pressure has increased slightly. Lower time frame traders may be looking too short at USD 7.26 and USD 7.5 based on ATOM’s reaction in those regions.