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ATOM Price Maintains $8.60 Support Despite Cosmos Network Outage After Upgrade

Last Updated June 6, 2024 10:32 AM
Valdrin Tahiri
Last Updated June 6, 2024 10:32 AM

Key Takeaways

  • The Cosmos Network experienced an outage after releasing the v17 upgrade
  • ATOM’s price has traded under a resistance trend line but above horizontal support.
  • How unusual is the network outage, and will it have a bearish effect on its price?

The Cosmos price has not performed well in 2024. In fact, it has fallen nearly 20%. The weakness is highlighted when looking at the recovery since the April 13 bottom, which has been miniscule.

On top of this, the Cosmos network experienced an outage after launching an upgrade on June 5, which albeit did not have an effect on the price. Can the ATOM price recover from these hardships, or will the bearish trend deepen?

Cosmos Suffers Outage After Network Upgrade

In May, Cosmos announced the Gaia v17 upgrade, which, among other things, lets new chains customize which validators participate and how much voting power they need. The Cosmos upgrade went live on June 5, at block height 20,739,800. 

However, the process of the release was not smooth. Rather, the Cosmos team announced that the network suffered a temporary outage. Nevertheless, the problem was resolved after roughly four hours.

https://twitter.com/cosmoshub/status/17985128438532712234

While blockchain outages are uncommon, they are not unheard off. More famously, Solana experienced its 11th outage in February, and has been having outages every two months on average. Additionally, DYDX experienced a 9-hour outage in April  after a network upgrade.

The ATOM price did not react to the outage. Rather, it is trading inside the $8.60 horizontal area, where it has been since the start of April.

What to Make of ATOM’s Trend?

The weekly time frame chart shows the ATOM price has fallen under a descending resistance trend line since September 2022. During this period, it briefly broke out from the trend line in March (red circle) before falling below it again. Because of this, the breakout is considered just a deviation.

After the deviation, ATOM returned and bounced at the support area (green icon), where it has traded since the beginning of March.

ATOM Price Long-Term Movement
ATOM/USDT Daily Chart | Credit: TradingView

Technical indicators do not help to confirm the future trend’s direction. Rather, they give mixed readings. More specifically, the MACD and RSI are below 0 and 50, respectively. However, they have both started to trend upward.

As a result, looking at a lower time frame can help determine if ATOM will break out from the resistance trend line or fall below the $8.60 support instead.

ATOM Price Shows Weakness After Breakout

The daily time frame chart is leaning bearish. This is because of the weakness shown after ATOM broke out from a descending resistance trendline. Rather than continuing the increase, ATOM fell to its pre-breakout levels and trades in an ascending parallel channel (white).

These channels usually contain corrective movements, meaning that a breakdown is the most likely future outlook. If this happens, it will also cause a breakdown from the $8.60 horizontal support area.

ATOM Price Correction
ATOM/USDT Daily Chart | Credit: TradingView

Furthermore, the increase since the April 13 bottom resembles an A-B-C corrective pattern (black). So, it is unlikely that it is the start of a new upward trend.

Similarly to the weekly time frame, technical indicators give mixed readings.

So, the readings from the weekly and daily time frame imply a breakdown from the $8.60 area is more likely than a breakout from the resistance trend line. This prediction will be rendered invalid if ATOM breaks out from the short-term channel.

ATOM Unlikely to go on a Bullish Run

Unlike a large portion of other cryptocurrencies, the ATOM price has not performed well in 2024. Additionally, its future outlook seems bleak because of bearish readings in multiple time frames. A breakdown below $8.60 will confirm the bearish trend.

Disclaimer
Please note that the contents of this article are not financial or investing advice. The information provided in this article is the author’s opinion only and should not be considered as offering trading or investing recommendations. We do not make any warranties about the completeness, reliability and accuracy of this information. The cryptocurrency market suffers from high volatility and occasional arbitrary movements. Any investor, trader, or regular crypto users should research multiple viewpoints and be familiar with all local regulations before committing to an investment.
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