Why it’s best Cardano’s traders remain on the lookout

cardano ada cryptocurrency coin growth chart exchange chart 2 1 scaled

Disclaimer: The findings of the following analysis are the sole opinions of the writer and should not be taken as investment advice

While some altcoins have been quite volatile over the week due to Bitcoin’s hike above $42,000 and its subsequent retracement, the same cannot be said for Cardano.

Broader market cues did not seem to have a drastic effect on ADA’s price as it remained gridlocked between the strong resistance of $1.38-$1.40 and support at $1.25. However, tracking its movement since 19 May highlighted the formation of a pennant and a potential swing could be in store over the coming week. The question is – In which direction?

Cardano Daily Chart

Source: ADA/USD, TradingView

Since the 19 May sell-off, Cardano has formed four higher lows at $1.95, $1.86, $1.49, and $1.38. An upper sloping trendline was used to plot these points on the charts. Similarly, a lower trendline was plotted along the slightly higher lows of $0.95, $1.0, and $1.02.

This created a pennant pattern which indicated two possible outcomes going forward.

Bullish Outcome 

Let’s discuss a bullish outcome first since this seemed achievable with one simple development. Buyers need to target a hike above the $1.38-$1.40 resistance – A result that could trigger a near 40% surge in value towards the highest point in ADA’s pattern at $1.88. Excited? Well, it wouldn’t be that plain and simple.

This scenario would require ADA to close above its weekly 20-SMA (red) (not shown) which has run bearish since 5 July. Moreover, the Visible Range noted a decent number of sellers at ADA’s aforementioned resistance zone.

Bearish Outcome

Quite a few developments need to take place for this result. For starters, ADA would need to drop below its daily 200-SMA (green) and Visible Range’s POC at $1.21. Ideally, ADA would find support at the higher low at $1.05, but a close below this level might lead to a sharp sell-off in the market. The 23 April swing low of $0.92 would be in focus in such a situation.

Winner?

At press time, the buyers were at an advantage. The RSI was above 60 – A sign of bullish strength in the market. The Squeeze Momentum Indicator noted upwards pressure, while the MACD maintained its northbound trajectory, albeit with some choppy movement. However, the indicators had not yet matured to levels to indicate a clear winner in this battle.

Conclusion

ADA did flash positive signals as it traded close to the resistance zone of $1.38-$1.40. Traders should be on the lookout for a break above or below key levels to ascertain ADA’s next destination over the coming weeks.

Ronnie Huss

Ronnie Huss

Leave a Reply

Your email address will not be published. Required fields are marked *

Share:

Share on telegram
Share on facebook
Share on twitter
Share on linkedin
Share on whatsapp

Related Posts

bitcoin
Bitcoin (BTC) $ 61,172.39
ethereum
Ethereum (ETH) $ 3,374.43
tether
Tether (USDT) $ 0.997841
bnb
BNB (BNB) $ 571.45
solana
Solana (SOL) $ 137.78
staked-ether
Lido Staked Ether (STETH) $ 3,375.59
usd-coin
USDC (USDC) $ 0.999745
xrp
XRP (XRP) $ 0.474245
the-open-network
Toncoin (TON) $ 7.59
dogecoin
Dogecoin (DOGE) $ 0.123418
cardano
Cardano (ADA) $ 0.391917
tron
TRON (TRX) $ 0.121399
shiba-inu
Shiba Inu (SHIB) $ 0.000017
avalanche-2
Avalanche (AVAX) $ 25.13
wrapped-bitcoin
Wrapped Bitcoin (WBTC) $ 61,313.43
chainlink
Chainlink (LINK) $ 13.93
polkadot
Polkadot (DOT) $ 5.83
bitcoin-cash
Bitcoin Cash (BCH) $ 380.77
uniswap
Uniswap (UNI) $ 9.43
near
NEAR Protocol (NEAR) $ 5.55
wrapped-eeth
Wrapped eETH (WEETH) $ 3,505.79
matic-network
Polygon (MATIC) $ 0.574933
leo-token
LEO Token (LEO) $ 5.75
litecoin
Litecoin (LTC) $ 70.77
dai
Dai (DAI) $ 0.997763
pepe
Pepe (PEPE) $ 0.000012
fetch-ai
Fetch.ai (FET) $ 1.66
internet-computer
Internet Computer (ICP) $ 8.15
kaspa
Kaspa (KAS) $ 0.156089
ethena-usde
Ethena USDe (USDE) $ 0.998914
ethereum-classic
Ethereum Classic (ETC) $ 23.44
renzo-restaked-eth
Renzo Restaked ETH (EZETH) $ 3,402.06
aptos
Aptos (APT) $ 6.98
render-token
Render (RNDR) $ 7.81
monero
Monero (XMR) $ 162.50
hedera-hashgraph
Hedera (HBAR) $ 0.080646
cosmos
Cosmos Hub (ATOM) $ 6.95
arbitrum
Arbitrum (ARB) $ 0.831646
stellar
Stellar (XLM) $ 0.090891
filecoin
Filecoin (FIL) $ 4.43
okb
OKB (OKB) $ 41.40
mantle
Mantle (MNT) $ 0.760011
blockstack
Stacks (STX) $ 1.69
crypto-com-chain
Cronos (CRO) $ 0.091159
immutable-x
Immutable (IMX) $ 1.55
injective-protocol
Injective (INJ) $ 23.15
first-digital-usd
First Digital USD (FDUSD) $ 0.997330
lido-dao
Lido DAO (LDO) $ 2.41
sui
Sui (SUI) $ 0.885018
vechain
VeChain (VET) $ 0.026157