As we traverse the unpredictable terrain of the crypto market, one question frequently surfaces: Is the declining demand a concern for ATOM bulls? Recently, ATOM has been grappling with a downward trend, hitting a 2023 low of $6.158. The absence of reversal signals from Futures market data further fuels the concern.
ATOM’s Struggle in the Last Quarter of 2024
The fourth quarter of 2024 was particularly challenging for Cosmos [ATOM], which was unable to stem the tide of increased selling pressure. In October alone, the altcoin’s value depreciated by 14%, settling at a press time value of $6.2. The lack of immediate signs of price reversal amplifies the concern surrounding ATOM’s performance. A recent technical analysis of ATOM highlighted an additional price drop, suggesting that ATOM could plummet further if it dips below the previous low of $6.287 recorded on 11 September.
Market Leverage Shifts in Favor of Sellers
The recent extended drop has given sellers an upper hand in the market. The previous low of $6.287 happened within a daily bullish order block of $5.550 – $6.520 (cyan) formed on 18 June 2022. Despite the bullish order block curtailing the previous pullback, the subsequent drop indicates a shift in market leverage towards sellers. A Fibonacci tool plotted between the recent high and previous low suggests immediate bearish targets of $5.95 and $5.75 for aggressive sellers. However, a price reversal at the bullish order block could potentially propel ATOM towards $6.8 or $6.6, although this seems unlikely at the moment.
Negative Price Indicators and Reduced Capital Inflows
Key price indicators for ATOM have been predominantly negative, reinforcing the bearish trend. The RSI has retreated to the oversold zone, signaling a surge in selling pressure. The sellers’ edge is further amplified by a declining Spot market demand, evident from the downsloping OBV. Capital inflows have also seen a downward trend, as indicated by the southward movement of the CMF.
In the Futures market, the Open Interest rates have fallen from >$75 million to below $65 million, highlighting a decline in demand in the derivatives segment. Furthermore, the fluctuating funding rates suggest that a robust reversal for ATOM could be a challenging task. The sellers’ dominance is underscored by the declining CVD (Cumulative Volume Delta), hinting that bullish efforts might be constrained for some time.
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