In preparation for a probable 21% falling triangle breakout to $7.71, the price of Cosmos is consolidating near $10.00. The Cosmos Hub community analyzed the factors that prevented ATOM 2.0 from being implemented. If held, the $9.75 horizontal support of the triangle might invalidate ATOM's bearish view. The price of Cosmos has been slowly declining since bulls tried to recover losses from the premature collapse of FTX but were rejected at $12.40 late last week. The bears may be regaining control if a higher low pattern is seen below a declining trend line. Support at $9.75 could be the only thing stopping ATOM from potentially falling by 21% to $7.71.
What caused the decline?
From the most recent Cosmos Hub vote (1), important lessons have been learned. Recently, a proposal that would supervise the deployment of ATOM 2.0 was voted on in favor of a sizable portion of the Cosmos Hub. Despite receiving a majority of yes votes, the proposed modifications covered in this article could not be implemented because of a provision designed to guard against the risk of network 51% assaults. In the opinion of the Cosmos Hub development team, the rejected idea illustrates crucial lessons that must be understood. For instance, the writers will need to make their recommendations more understandable in the future. The development team is of the opinion that a sufficient amount of time should be provided to the community to consider the ramifications of big changes.
The concepts will be made more understandable, and the input will be encouraged in neutral discussion places. Cosmos (2) price screams "sell," and these levels should be watched. The price of Cosmos is currently trading at $9.97 after failing to overcome resistance from a declining trend line. Due to its location near the top of a falling triangle formation, price consolidation will occur before a breakout is definitively verified.
Triangle formation, particularly one with a flat bottom, frequently denotes the continuation of a downward trend. In other words, there is a serious risk that the price of Cosmos will drop by 21% to $7.71. Trading, however is halted until ATOM crosses below the horizontal base of the triangle at $9.75. The traditional approach utilized by technical analysts, extrapolating below the Cosmos price breakout point, is used to determine the 21% breakout by measuring the separation between the pattern's largest points.
What the EMA indicates
The price of Cosmos is below all three main moving averages—the 50-day EMA, the 100-day EMA, and the 200-day EMA (3), which further suggests that purchasers are at a disadvantage. As a result, a four-hour candlestick closure below the triangle support at $9.75 might start a sell-off that takes prices as low as $7.71.
Bulls still have a voice in the direction ATOM may move, given that we haven't yet had a breakout, especially if a purchase signal from the Moving Average Convergence Divergence (MACD) indicator is taken into account. As a result, a bullish breakthrough over the resistance at the declining trend line is still possible. In order to potentially book profits around $12.40 and $15.58, traders anticipating an upward movement should hold off on opening long positions until Cosmos price breaks and maintains above the trend line.