Short squeeze or bull trap? Cosmos crypto tests $1.50 resistance

Cosmos [ATOM] has rallied 8.3% over the past 24 hours, with a 91.9% surge in daily trading volume. The uptick in volume was accompanied by speculative interest, too, but there could be a warning sign in the short-term.

The Open Interest has climbed 11.3% in the past 24 hours. This signaled heavy speculative activity, and the spot demand was also high, as demonstrated by the uptick in trading volume as well as the spot CVD spike in recent hours.

However, the negative funding rate was a sobering thought for the bulls. The market was betting on a price reversal, and short positions were willing to pay a fee to keep their positions open.

Here’s what the price action has to say about the upcoming ATOM trends.

Bullish moving average crossover foretells bullish ATOM momentum

The swing move down from $2.29 to $1.21 began in late May. The structure was clearly bearish, but it does not rule out a short-term bounce.

At the time of writing, the moving averages formed a bullish crossover, and the Cosmos crypto price has also climbed above the averages.

The MACD was also climbing toward the zero line, showing weakening bearish momentum and a potential recovery higher.

While the MACD was unable to climb toward the early July highs, the CMF managed to break out past the +0.05 mark to signal strong capital inflows.