After Parabolic Rally, Cosmos (ATOM) Just Formed a Textbook Sell Signal
Cosmos (ATOM) has been one of the best-performing crypto assets of the past few weeks. The prominent altcoin has gained dozens of percent against the dollar and against BTC over recent weeks, setting new all-time highs.
In the past 24 hours, the asset is up 3.6% and up 20% in the past seven days.
Cosmos may be poised to reverse, though, with the Tom Demark Sequential printing a textbook sell signal.
Related Reading: These 3 Trends Suggest Bitcoin Is Poised to Bounce After $1,000 Drop
Cosmos (ATOM) Prints Reversal Signal
Cosmos (ATOM) has formed a bearish reversal signal on its BTC pairing, according to a Telegram channel tracking instances of the Tom Demark Sequential.
The indicator is a time-based indicator that prints “9” and “13” candles when an asset is at an inflection point in its trend.
According to the Telegram channel, ATOM has formed a “sell 9” candle on the current weekly candle. This could trigger a strong bearish drop in the weeks ahead.
Chart of Cosmos' price action against BTC over the past year or so from a Telegram channel tracking the Tom Demark Sequential. Chart from TradingView.com
The Tom Demark Sequential has had decent success with Cosmos thus far.
As can be seen with the chart above, a Tom Demark “Buy 9” was formed after a strong drawdown. The asset then bounced by dozens of percent in the months that followed.
Cosmos also flatlined in the two weeks after it formed a “sell 9” candle, but then proceeded to move higher. Technically, this signal was not incorrect as TD Sequential “9” candles are seen when an asset consolidates, not at reversal points.
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Bitcoin to Dictate Altcoin Directionality
Bitcoin is likely to dictate the directionality of altcoins, both against the dollar and against BTC. Volatility in the price of the leading cryptocurrency has often meant that altcoins underperform. As Mohit Sorout of Bitazu Capital wrote to NewsBTC;
“Most (altcoin) cycles in crypto are centered around bitcoin volatility. When it dries up, no one wants to trade btc which becomes evident from the volume as well. This leads to a large uptick in speculation on alts, driving their prices up – typically alts with strong narratives & large scale memetic behavior get the most volumes. It’s interesting to note that btc just experienced its one of the lowest volatility periods. Volatility is a sinusoidal wave & we just passed the trough region of it.”
Bitcoin is poised to see volatility as its price tightens in the range between $11,000-12,000.
Related Reading: Yearn.finance (YFI) Jumps 30% Towards Bitcoin’s All-Time High Price of $20k
Featured Image from Shutterstock Price tags: atomusd, atombtc Charts from TradingView.com After Parabolic Rally, Cosmos (ATOM) Just Formed a Textbook Sell Signal
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via https://www.ohnocrypto.com
Nick Chong, Khareem Sudlow
