Cosmos (ATOM) has been one of the best-performing crypto assets of the past few weeks. The prominent altcoin has gained dozens of percent against the dollar and against BTC over recent weeks, setting new all-time highs.
In the past 24 hours, the asset is up 3.6% and up 20% in the past seven days.
Cosmos may be poised to reverse, though, with the Tom Demark Sequential printing a textbook sell signal.
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Cosmos (ATOM) Prints Reversal Signal
Cosmos (ATOM) has formed a bearish reversal signal on its BTC pairing, according to a Telegram channel tracking instances of the Tom Demark Sequential.
The indicator is a time-based indicator that prints “9” and “13” candles when an asset is at an inflection point in its trend.
According to the Telegram channel, ATOM has formed a “sell 9” candle on the current weekly candle. This could trigger a strong bearish drop in the weeks ahead.
Chart of Cosmos' price action against BTC over the past year or so from a Telegram channel tracking the Tom Demark Sequential. Chart from TradingView.com
The Tom Demark Sequential has had decent success with Cosmos thus far.
As can be seen with the chart above, a Tom Demark “Buy 9” was formed after a strong drawdown. The asset then bounced by dozens of percent in the months that followed.
Cosmos also flatlined in the two weeks after it formed a “sell 9” candle, but then proceeded to move higher. Technically, this signal was not incorrect as TD Sequential “9” candles are seen when an asset consolidates, not at reversal points.
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Bitcoin to Dictate Altcoin Directionality
Bitcoin is likely to dictate the directionality of altcoins, both against the dollar and against BTC. Volatility in the price of the leading cryptocurrency has often meant that altcoins underperform. As Mohit Sorout of Bitazu Capital wrote to NewsBTC;
“Most (altcoin) cycles in crypto are centered around bitcoin volatility. When