- TD Sequential indicates a sell signal for Cosmos (ATOM), hinting at a potential price correction.
- Declining trading volume and bearish technical indicators raise concerns about ATOM’s short-term outlook.
Cosmos (ATOM) is facing a challenging start to 2024 as the TD Sequential indicator signals a potential price correction. Analyst Ali Martinez has raised concerns that ATOM could see a correction to as low as $9, highlighting the importance of monitoring this cryptocurrency’s performance in the coming weeks.
The TD Sequential has flashed a sell signal on #Cosmos 3-day chart! This indicator suggests a possible price correction could be on the horizon, potentially driving $ATOM down towards $10, or even as low as $9. pic.twitter.com/FwvXLL6RBp
— Ali (@ali_charts) December 31, 2023
Understanding TD Sequential and Its Implications
The TD Sequential indicator is a tool used to identify the exhaustion of a prevailing trend and the likelihood of a price reversal. According to Martinez’s analysis, buyers who drove ATOM’s price to $12.25 on December 26th have stepped back from the market. As of the current moment, ATOM’s price stands at $10.58, reflecting a 6.38% decrease in the last seven days.
Earlier, AMBCrypto reported a surge in ATOM‘s price and emphasized the impressive activity on the Cosmos network. However, the recent prediction paints a less optimistic picture, prompting us to examine ATOM’s trading volume over the past week. Santiment’s on-chain data indicates that ATOM’s trading volume has significantly decreased, standing at 129.8 million at the time of writing, compared to 479.75 million on December 26th. This decline underscores the notion that buyers have scaled back their interest in ATOM.
Bearish Momentum and Technical Indicators
From a technical perspective, ATOM’s momentum is firmly in the bearish territory, a sentiment supported by the Moving Average Convergence Divergence (MACD), which currently reads -0.020. Negative values of the MACD signal increasing downward momentum, aligning with Martinez’s prediction of a potential drop below $10.
Another indicator strengthening this bearish outlook is Aroon. The Aroon Down (blue) stands at 85.71%, while the Aroon Up (orange) lags behind at 7.14%. This crossover suggests that the downtrend may persist in the short term.
Considering the Funding Rate and Potential Entry Points
Despite the bearish indicators, ATOM’s Funding Rate remains positive at 0.039%, indicating a bullish sentiment among traders. However, it’s essential to note that high funding during a price decline is not an ideal entry point.
Traders on the sidelines should remain vigilant for the potential flip to a negative Funding Rate or wait for ATOM to reverse its trend after a potential decline. As Cosmos (ATOM) navigates these challenges, the crypto community will closely monitor its price movements and technical indicators for insights into its 2024 performance.