A lengthy lowering resistance line has been overcome by ATOM. Resistance is there at $17.60 and $22. Short-term double top pattern produced by ATOM.
The first blockchain to be launched in the Cosmos ecosystem, the Cosmos Hub, uses ATOM as its native coin. Cosmos is a network of sovereign blockchains, not a layer-1 or layer-2 blockchain. In essence, it is intended to serve as the link between all app-chains.
There will probably be many blockchains that communicate with one another because it would be incredibly impossible for a single blockchain to scale to fulfill the needs of everyone on the planet. As a bridge between both blockchains, Cosmos would be incredibly useful in this situation.
One of the top performers in the cryptocurrency market over the past month has been ATOM, which has outperformed both Ethereum and the decentralized finance (DeFi) market significantly.
Long-term resistance to ATOM
Since making its initial lower high in January 2022, ATOM has been dropping beneath a downward resistance line. The decline has brought the price to a low of $5.50 in June 2022.
Since then, the price has been rising, and in the last week of August, it was able to depart from the line. The weekly RSI hasn't yet climbed above 50 or beyond the declining trendline (green line) despite the breakthrough. The trend would need to break out in order for it to be deemed bullish.
Double-top design
The daily chart reveals that the price had been rising since June 18, when it hit the aforementioned low. It exited the channel on September 9 and came back six days later to confirm it as support (green icon).
The fact that the daily RSI is over 50 validates the breakout. ATOM is currently trying to move past the $16.70 barrier level of the 0.382 Fib retracement. If successful, it is expected to rise toward the $22 resistance already mentioned.
Even though the weekly and daily timeframes are bullish, the six-hour chart displays a double top, which is seen as a bearish pattern. Along with the double top, the RSI's bearish divergence was also present (green line).
Therefore, it's probable that prices will fall until they reach around $13.40 before starting to rise again.
