ATOM price tests $4 zone amid declining momentum and fading DeFi inflows
Cosmos (ATOM) continued its downward move this week, slipping toward the $4.00 support level after struggling to maintain momentum above the $4.50–$4.70 range. The latest price action underscores growing selling pressure as broader market sentiment weakens, with traders closely watching whether bulls can defend this critical support.
According to the daily chart, ATOM has been trading within a tight consolidation channel since early August. After multiple failed attempts to break through resistance near $4.90, the token has retraced to a familiar demand zone between $3.90 and $4.10, where buyers previously stepped in to reverse losses.
Volume indicators show a mild uptick in trading activity as the price approaches this green zone, suggesting potential accumulation. However, the overall trend remains cautious. “Cosmos is sitting on a knife’s edge,” said BITX technical strategist. “If the $4.00 level fails to hold, we could see further downside toward $3.60, but a strong rebound here might spark a short-term recovery rally back to $4.50.”
The chart also highlights a broader descending channel breakout in July, followed by weeks of sideways movement — a pattern often seen before larger directional shifts.
Market data suggests declining inflows into DeFi ecosystems built on Cosmos, reflecting investor hesitation amid tightening liquidity conditions. Despite this, long-term fundamentals remain intact, supported by the network’s growing interoperability and cross-chain development activity.
“ATOM’s valuation may be under pressure, but the project’s technical foundation remains one of the strongest in the modular blockchain space,” According to BITX analysts. “Short-term traders are likely taking profits, but developers and long-term holders continue to accumulate in this range.”
The $3.90–$4.10 support band will likely determine ATOM’s near-term direction. A decisive bounce could confirm market bottoming, while a sustained drop below $3.80 might expose deeper losses. For now, Cosmos remains in a defensive phase, with investors balancing short-term caution against long-term confidence in the network’s innovation-driven ecosystem.
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.