Home » Altcoin Cosmos price rebounds 45% in one week despite Terra’s debacle — What’s next for ATOM? Altcoin Reading 3 min Views 5 ATOM’s ascending triangle setup opens up the possibility for another major crash by June 2022. Cosmos (ATOM) emerges as the biggest gainer among the top cryptocurrencies this May 20, brushing aside the fears about its association with Terra (LUNA), an algorithmic stablecoin project whose market valuation fell by 99% last week. Cosmos TVL down from $10M to $155K ATOM’s price increased by over 10% intraday to almost $12. The gains appeared as a part of a broader upside retracement that started on May 12 when it had fallen to its eleven-month low near $8. That marked around a 45% price recovery in almost a week. ATOM/USD daily price chart. Source: TradingView The ATOM price rebound occurred despite its parent chain, Cosmos Hub, witnessing massive capital outflows from its liquidity pools. Notably, the total value locked (TVL) with Cosmos dropped to around $155,000 on May 20, compared to its year-to-date high of over $10 million, according to Defi Llama. Terra emerged as one of the primary reasons behind the drop since its liquidity pools made up 92% of the overall Cosmos TVL as of May 9. But on May 20, the project’s stake in the Cosmos ecosystem was just around 17%. Cosmos TVL distribution. Source: Defi Llama Meanwhile, a hawkish Federal Reserve had also contributed to the selloff across riskier assets last week, hurting cryptos like Bitcoin (BTC), Ether (ETH), and ATOM in tandem, as Cointelegraph covered. ATOM price rebound sustainable? From a technical perspective, ATOM remains at the risk of continuing its decline in Q2/2022. First, the Cosmos token’s 45% rebound accompanies a drop in its trading volumes, suggesting a low trader turnout behind the rally that, in turn, could lead to a price reversal. Second, the price appears to have formed an ascending triangle, a trend continuation indicator, as shown in the chart below. ATOM/USD four-hour price chart featuring ascending triangle setup. Source: TradingView As a rule of technical analysis, ascending triangles formed during a downtrend resolve after the price breaks below their lower trendline and continue falling until it reaches the level at length equal to the triangle’s maximum height. Applying the same theory on Cosmos shifts ATOM’s downside target to $7.50 with the breakdown point around $10.35. Bullish reversal scenario In some cases, however, ascending triangles in a downtrend could lead to a trend reversal instead of continuation. Therefore, the bulls could attempt a breakout with a run-up to the triangle’s upper trendline near $12.50. ATOM’s likelihood of continuing its recovery is high if this occurs particularly with increasing trading volume. In doing so, the upside target for ATOM/USD could again be at the length equal to the maximum distance between the triangle’s upper and lower trendline, as shown below. ATOM/USD four-hour price chart featuring ascending triangle’s reversal setup. Source: TradingView In other words, the bullish scenario puts ATOM’s price en route to $17.25 by June, up around 45% from May 20’s price. The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.