Bearish RSI Divergence Hints At 16% Downside Risk In ATOM Price

ATOM price have a sight for the north, extending the gains along the rising channel since June. However, the buyers remained sidelined on Monday amid a broader lackluster cryptomarket move. ATOM price analysis is bearish today.

The token is expected to enter a corrective pullback as hinted by the momentum oscillator. It has been nearly three-month ATOM is in a continuous uptrend. However, in today’s session, the price shows signs of exhaustion.

• ATOM price trades modestly lower on Monday.
• A decisive break below $12.10 would bring more losses in the token.
• Bearish RSI divergence enhances probable downside move chances.

ATOM price looks for correction

 On the daily chart, ATOM is trading in a “Rising Channel” pattern, making higher highs and higher lows. Over the last few days, the volumes are above the average, indicating more traders are encouragingly buying near the lower levels. In recent times, the price takes good support arising from a channel pattern.

Further, the price trades above the 50-day exponential moving average.

However, over the past few weeks, ATOM is showing signs of high volatility. As can be seen in the chart, the fall or the up moves, are very strong, with full body candles along with big moves on both sides, indicating, that this current move will easily move close to its previous swing high, or even as the higher probability of breaking that level as well. 

The bearish RSI divergence indicates a corrective pullback from the current levels. A lower move toward the ascending trendline at $12.10 cannot be ruled out. If the selling persists, the next target will be the 50-day exponential moving average at $11.28.

The nearest support is the previous swing low ($12.10), whereas the nearest resistance could be found at ($13.06). There is a higher probability of the price breaking the support level. “Selling on rising” is the best course of action we can go with.

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On the other hand, sustained buying pressure above the $13.50 level could invalidate the bearish outlook. And the price can move toward $15.0. The asset could even gain some follow-through traction following the medium-term gains.

We hold a slightly bearish view of ATOM’s next move. Below $12.10 closing on the daily time frame, we can put a trade on the sell side. 

As of press time, ATOM/USD is reading at $12.80, down 1.89% for the day. The 24-hour trading volume stands at $268,641,269 with modest gains according to CoinMarketCap data.