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After a big drop with the rest of the crypto markets today, will traders use this as a short-term buying opportunity on ATOM to play a major support area retest?

Before moving on, ICYMI, today’s Daily U.S. Session Watchlist looked at a simple trendline bounce in EUR/JPY, so be sure to check that out to see if there is still a potential play!

Intermarket Update:

Equity Markets Bond Yields Commodities & Crypto
DAX: 15843.09 -0.56%
FTSE: 7149.67 -0.53%
S&P 500: 4520.03 -0.34%
NASDAQ: 15374.33 +0.07%
US 10-YR: 1.371% +0.049
Bund 10-YR: -0.318% -0.001
UK 10-YR: 0.741% +0.001
JPN 10-YR: 0.034% -0.005
Oil: 68.34 -1.37%
Gold: 1,795.80 -2.06%
Bitcoin: $46,753.00 -9.58%
Ethereum: $3,417.90 -13.39%

Fresh Market Headlines & Economic Data:

Dow drops 260 points as investors grow concerned about delta variant’s impact on economic recovery

Cryptocurrency prices tumble and exchange trading falters as snags crop up

White House proposes stopgap bill with disaster aid as Congress hashes out trillions in spending

Canadian consumer confidence slides for third straight week

Bitcoin tumbles 10% as El Salvador adopts it as legal tender

Gold hastens retreat as dollar gains upper hand

BOJ needs realistic price goal to avoid endless stimulus, ex-Deputy Governor says

Upcoming Potential Catalysts on the Economic Calendar

Japan Current Account, GDP, Bank Lending at 11:50 pm GMT
RBA Chart Pack at 1:30 am GMT (Sept. 8)
Japan Eco Watchers Survey at 5:00 am GMT (Sept. 8)
France Non-Farm Payrolls at 5:30 am GMT (Sept. 8)
France Trade Balance at 6:45 am GMT (Sept. 8)
Italy Retail Sales at 8:00 am GMT (Sept. 8)
RBA Debelle speech at 8:10 am GMT (Sept. 8)

If you’re not familiar with the forex market’s main trading sessions, check out our Forex Market Hours tool.

What to Watch: ATOM/USD

ATOM/USD 4-Hour Crypto Chart
ATOM/USD 4-Hour Crypto Chart

With no major macroeconomic events ahead in the Asia and London sessions, we’ll turn to the crypto markets for potential short-term opportunities as volatility spiked and remains elevated at the moment.

Specifically, we’re checking out the Cosmos token (ATOM) as the broad crypto sell-off pushed ATOM/USD price down to a previous area of resistance-turned-support.

On the four-hour chart above, ATOM/USD was trading above $27 before the bulls were rudely interrupted by a bitcoin-induced broad crypto crash, correlating with news that the El Salvador government officially made bitcoin legal tender in their country.

Given that that news doesn’t have much to do with ATOM fundamentals, this drop may be taken as a buying opportunity for the bulls to play the recent bullish sentiment on the Cosmos project (i.e., strong ecosystem growth given its focus on interconnecting the different blockchain systems).

With the market now trading at the strong area of interest (was previous resistance then turned into support in August), bullish ATOM traders may want to watch the $17 – $20 area for bullish reversal patterns before considering a short-term long position.

Stay frosty though as volatility may remain elevated until Asia traders are able to fully react to Tuesday’s crypto flash crash.