Volume-backed rebound from key support hints at potential trend shift as resistance looms at $4.30
Cosmos’ ATOM token is attempting a rebound after a recent selloff, with technical signals pointing to a stabilization phase around a major demand zone between $4.00 and $4.10. A clear volume expansion accompanied the bounce, offering early signs of renewed buying pressure.
The 4-hour chart reveals a well-defined ascending wedge that broke down in late July, leading to a steep drop from the $5.20 region to a local low near $4.05. The drop tested a historical accumulation zone, where bulls have stepped in aggressively in previous cycles.
Key technical levels define short-term outlook
The chart shows a green support block between $4.00 and $4.10, which has acted as a demand zone since early June. ATOM price bounced from this level after forming a local low at $4.13, accompanied by a surge in volume, reflecting increased market activity near this price.
“Price reacting to historical support with rising volume is often a sign of short-term demand,” said BITX analyst monitoring mid-cap altcoins.
However, the red resistance block between $4.28 and $4.34 remains unbroken, capping upside momentum for now. Bulls will need to reclaim this zone convincingly for a bullish continuation structure to form.
Volume confirms support zone defense
Volume data reinforces the chart structure, with a visible increase in participation as price touched the green zone. This suggests accumulation by buyers defending the $4.05 level, with sellers retreating as price held firm.
“The rejection from $4.34 shows supply is still present, but buyers absorbing dips below $4.10 signals strength,” said BITX market structure researcher.
Watch for breakout or range continuation
If ATOM closes above $4.35 with volume, it could signal a short-term reversal back toward the $4.60–$4.80 zone. However, failure to break above the red resistance may result in further range-bound trading between $4.05 and $4.30, as the market awaits a catalyst.
The $4.05–$4.10 zone remains the key line of defense for bulls.
Disclaimer
This content is for informational purposes only and does not constitute financial, investment, or legal advice. Cryptocurrency trading involves risk and may result in financial loss.