The broader markets saw a strong comeback by the bulls this week after a sharp downfall in the previous sessions. Cosmos (ATOM) price had already been in a declining trend, which widened as the market suffered weakness.
However, the recent sessions saw a strong comeback by the bulls in the broader markets and Cosmos. In recent sessions, ATOM made a strong comeback of nearly 15%. ATOM was exchanging hands at close to $5.21 at the time of writing, recording a positive development of 2.44% intraday.
Despite the recent recovery, investors fear another selloff as the long-term trend still points to the bearish side. However, analysts noted a slight change in the on-chain data. This hinted that the recovery may continue to prevail rather than any correction ahead.
Weighted Sentiment Curve Adds Improvement to Investors’ Sentiment
While the broader market is regaining strength, investors are searching for potential cryptocurrencies that may generate short-term returns on their capital.
Despite being in a long-term bearish trend, Cosmos (ATOM) might have the potential to generate impressive returns in the short term, as per analysts.
Analysts have noted a significant development in the recent sessions in an important on-chain metrics weighted sentiment.
The positive sentiment has grown rapidly in recent sessions. Moreover, the weighted sentiment curve has shifted to positive territory, indicating a continuation of the recovery.
The weighted sentiment curve represents the current bias of the traders and investors, whether positive or negative, and where it is headed. A positive sentiment dominates if the weighted sentiment curve hovers above the zero line and vice versa.
Cosmos Price Technical Analysis
From a technical standpoint, Cosmos’ pricewas headed for a recovery after a sharp crash. ATOM was lagging below the 20, 50, and 200-day EMAs, reflecting a strong bearish trend in the previous sessions.
On the higher side, the most recent hurdle lies near $5.7. The previous support zone has now turned to resistance. Also, the $5.7 level is important because it is the golden zone of Fibonacci retracement tools.
Fibonacci drew from the recent swing high of $6.8 to the recent swing low of $4. The $5.7 level emerged as the 50% zone. The 50% zone of Fibonacci is crucial for a trend continuation and a trend reversal.
A bullish reversal may be observed on the charts if ATOM breaches the $5.7 level and resumes further.
Conversely, if the recovery loses steam near the 50% retracement zone, it may emerge as a sell-on-rise opportunity for the bears. The price may see more downfalls.
When writing, the Relative strength index line has recovered from an oversold zone and was placed at 40.30 points.
On the other hand, the 14-day SMA line was placed close to 34.72 points. Moreover, a bullish crossover between both lines was observed, indicating a price recovery.
