Cosmos, Elrond Prepare to Bounce
Cosmos and Elrond appear to have gathered enough liquidity to rebound strongly.
Key Takeaways
- Cosmos and Elrond have risen by more than 10% over the past two days.Â
- A few technical patterns reveal that both tokens have more room to go up.
- Further buying pressure could push ATOM to $33.5 and EGLD to $204.Â
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Cosmos and Elrond are showing impressive upside potential after both tokens were able to keep vital support.
Cosmos and Elrond Are on the Rise
Cosmos and Elrond appear to be bouncing swiftly from crucial support areas after incurring significant losses over the past three weeks.
ATOM has seen its price drop by nearly 33% since Apr. 3, going from a high of $33.3 to hitting a low of $24.4 recently. Although the Layer 1 token threatened to break through a vital support level, it appears that sidelined investors are getting back into the market. Over the past two days, a significant spike in demand has pushed prices up by roughly 10%.
Now that Cosmos appears to have gained the strength to rebound, it may have more room to go up. Price history reveals that ATOM has been consolidating within an ascending parallel channel since September 2021.
Each time the token has tested the channel’s lower boundary since then, an upswing to the middle or upper trendline succeeds. From this point, Cosmos tends to retrace to the pattern’s lower edge, which is consistent with the characteristic of a channel.
Similar price action suggests that ATOM could be on its way to testing the channel’s middle trendline at $33.5, which represents a 36% gain from the current levels. Still, Cosmos would have to keep $24.4 as support for the optimistic outlook to be validated. Failing to do so could result in a correction to $17.6.
Over the past few weeks, Elrond also entered a steep downtrend, losing more than 70 points in market value. The losses appear to have been contained by the ascending triangle’s hypotenuse forming on EGLD’s two-day chart. If this support level continues to hold, prices could move back to the pattern’s x-axis at $204.
The Tom DeMark (TD) Sequential indicator adds credence to the optimistic outlook. It has presented a buy signal in the form of a red nine candlestick on the two-day chart. The bullish formation anticipates that a spike in upward pressure could result in a one to four candlesticks upswing or the beginning of a new upward countdown.
As long as Elrond continues to trade above the $141.5 support level, it has a good chance of advancing to $204. But if it were to print a two-day candlestick close below the triangle’s hypotenuse, a downswing to $112 is likely.
Disclosure: At the time of writing, the author of this piece owned ETH and BTC.
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