Cosmos ATOM eyes potential 15% rally after breaking out of falling wedge

ATOM, the native token of Cosmos, may be nearing the end of a prolonged bearish trend that began on 18 February 2025. The token rose 5.25% over the past 24 hours, breaking out of a narrow trading range and suggesting room for a larger move. Trading volume also increased by 13.22% during the same period, indicating heightened market interest. After these gains, ATOM outperformed major cryptocurrencies including Bitcoin (BTC), Ethereum (ETH), XRP, and Solana (SOL) over the referenced timeframe.

Technical setup: breakout depends on a daily close

On the daily chart, ATOM’s near-term bias appeared bullish at the time of writing, particularly after it broke out of a falling wedge pattern accompanied by a large green engulfing candle. However, the breakout is not fully confirmed yet: ATOM still needs to close a daily candle above the pattern to avoid the risk of a fakeout.

If ATOM closes its daily candle above $1.77, it could rise by more than 15%, with the next resistance target at $1.98. A subsequent breakout above $1.98 could trigger an additional 20% rally, potentially pushing the price toward $2.40. This bullish outlook would be invalidated if ATOM fails to close a daily candle above $1.77.

Momentum indicators also pointed to caution. The Average Directional Index (ADX) had fallen to 16.16, below the 25 threshold, suggesting weak momentum alongside the recent price advance.

On-chain and derivatives signals turn more bullish

On-chain analytics from Nansen indicated that top addresses may have been positioning ahead of the move. The top 100 addresses increased their holdings by 2.96% over the past few weeks, aligning with the idea that larger participants anticipated a shift in ATOM’s price action.

Coinglass data also reflected increased trader interest, with many participants expecting continued upside.

Liquidation levels and positioning

ATOM’s exchange liquidation map showed notable activity around two key price areas: $1.61 on the downside (support) and $1.78 on the upside (resistance). At these levels, traders built $927.09K worth of long leveraged positions and $274.79K worth of short leveraged positions.

Open interest rises

ATOM’s Open Interest (OI) increased by 3.57% to $124.82 million, a sign of rising trader participation and growing confidence in the altcoin’s momentum.

Summary

• ATOM broke out of a bullish pattern, with conditions suggesting a potential 15%+ move if it holds above $1.77.
• Top 100 addresses increased holdings by 2.96%, while derivatives data showed more long positioning and higher open interest.