Cosmos : Time to get up & ATOM

What is Cosmos (ATOM):

Website: cosmos.network/

Whitepaper: cosmos.network/resources/whitepaper

Cosmos (ATOM) is a cryptocurrency that powers an ecosystem of blockchains designed to scale and interoperate with each other. The team aims to "create an Internet of Blockchains, a network of blockchains able to communicate with each other in a decentralized way.

This means that this projects aim is to create a a network where different Cryptocurrencies can communicate with eachother and transact and operate seamlessly together, I'm sure that if you truly believe Cryptocurrencies will be increasing in popularity and usage over the next coming years then its a no brainer a project or application like ATOM/COSMOS is neeeded to help make the thousands of emerging Cryptocurrencies work even more seamlessly together.

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Inverse Head & Shoulders Pattern:

The Inverse Head & Shoulders Patterns is one of the most well known chart patterns and has a higher success rate then most (success rate, is that rate at which the pattern hits its target; the "measured move").

The pattern can be seen as a potential sign that a momentum reversal is coming into play with the last part of the pattern: the right "Shoulder" showing the market structure printing a Higher Low (HL), in up trending markets the price continually shows higher lows so this pattern is a potential way of spotting a initial HL before a uptrend begins.

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Here are the main characteristics in which to identify a Inverse Head & Shoulders Pattern:

• VOLUME MIMICS PATTERN
• 3 VALLEYS, LEFT & RIGHT SIMILAR HEIGHT WITH MIDDLE DEEPEST
• TRIANGULAR IN APPEARANCE
• FOUND AFTER STRONG DOWNTREND
• HIGH SUCCESS RATE
• CAN BE SLANTED
• HIGH VOLUME ON BREAKOUT INCREASE SUCCESS CHANCES

Price forms 3 distinct valleys after a strong downtrend, the left and right valley should have a similar height (shoulders), the middle valley (head) has to be the deepest or this can not be a IHS pattern . They should seem triangular in appearance but as long as it fits the main characteristics can still be a valid pattern as sometimes they look "messy" on the smaller timeframes but valid on higher timeframes. Volume should also paint the same pattern with the 3 valleys, strong volume on breakout increases success rate.

As with any pattern you want to try buy on top of long term support areas not beneath to increase success chances.
( If you want to understand what potential support areas can be, visit the below linked idea on Order zones.)

The right shoulder should form a higher low (HL) which is a early sign of trend change, this is entry A, with entry B (riskier) being the bullish retest of of the “neckline”. The idea is to gain an early entry on the pattern at point A to maximize profits and reduce risk. Once price moves below the middle "valley" it is likely that the pattern is not valid anymore so this allows us to get a tight stop loss upon entry at "A". If you were to buy at B instead of A, you have a larger distance to the INVALIDATION point of the pattern which is not ideal.

We measure the height of the pattern and add it to the breakout level for a maximum possible price target. In Bull Markets these patterns hit targets as high as 60-70% of the time.

In this example on ATOM BTC the pattern as not fully formed yet so is still not validated, plus we are also under a important resistance area so we would need to clear that first. If that happens we have the chance to increase in value which is considered the "breakout".

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Support & Resistance Zones

If you want to understand the importance of the Blue/Green Zones market on my chart click the below image:

As you can see on the chart inbetween 0.0003275-0.0003700 you can see a Demand Cluster which is explained in the above image, if the price were to get back above area it can be a great sign for ATOM.

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Learning to trade patterns such as these can provide great opportunities if you understand price action and how to identify the key areas of the pattern that other traders and investors may be focusing on too, these areas become important psychological levels on the chart.

If you found the idea insightful you can show you support by liking & commenting thank you!

Comment:

ATOM continues to form its Inverse Head & Shoulders Pattern, looking good.

Comment:

Pattern did not turn out as expected but still bullish on this token, ATOM BTC has been a market leader in recovery as of late.

Comment:

Bullish above 0.003 area