We combine spin-polarized scanning tunneling microscopy with quantum master equation analysis to investigate the spin dynamics of the single atom magnet Dy on graphene/Ir(111). By performing reading and writing experiments, we show that the strongly spin polarized 5d6s valence shells, as well as their intra-atomic exchange coupling to the 4f shell, determine the pathways for magnetization relaxation and thus the spin dynamics. The good quantum number that determines which states are stable and which mechanisms for reversal exist in a given crystal field is the atomic total angular momentum J(z)(tot) and not the commonly considered J(z)(4f) of the 4f shell only.