The Cosmos (ATOM) price has trended bullish since March and recently made a large jump on May 10, driving speculation of a breakout from a descending wedge. This formation is seen as a bullish indication, showing the ascending force of buyers pushing the market back up. Several lower wicks have also been observed at the wedge's support level, confirming bearish activity was halted. This was further strengthened by a bullish engulfing candle, with the entire decrease of the previous period wiped out in the next.

Looking more closely, technical analysis of the six-hour timeframe provides a favorable outlook for ATOM. The Relative Strength Index (RSI) is currently close to the 50 level and rising, suggesting significant purchasing momentum and indicating where the market may head. This is reinforced by a bullish divergence, whereby the current decrease in momentum does not correspond to a decrease in price and can often lead to subsequent swings up. Furthermore, the RSI has recently broken from a descending resistance line, yet another sign of a bullish trend.

If ATOM price indeed rallies, a movement towards the closest resistance of $13.50 is predicted. If a breakdown instead occurs, there is significant downside risk to the yearly lows at an average price of $8.80. Conversely, if the current support level remains intact, ATOM may continue further up and establish a new sustainable price level.



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