Cardano (ADA) has moved up by about 6.02% in the past 24 hours. It had been on a steep downtrend for about 2 weeks; however, upon approaching long-term support and an all-time low of $.2300, the price drastically snapped back. Of course, this could just be as a result of the execution of all the buy limit orders that might have been placed there, in conjunction with instant trades being open to “buy the dip”. Is this a short-term reaction, or is ADA getting ready for a bigger move?
The chart above shows a long-term uptrend prior to the current 2-week-long downtrend. The price initially invalidated and broke through the first support level (red area). However, price has bounced off the second daily support level (green area) with a rejection candle (long wick candle). A bullish move can already be seen at the time of writing.
Since the red-marked support area has formerly been invalidated twice, chances are that the price might elevate above it and aim to reach the trendline (blue arrow). After that, two possibilities can be further pointed out. Price could react to the trendline in a manner that causes it to act as resistance, which would then cause a retracement back to any of the two support areas, OR if bullish pressure dominates well enough, the price could break the trendline and form a higher high, which would signal a continuation of the long-term uptrend. And of course, the breakout would be followed by a pullback, which would rest on the trendline as support and go on further (as mapped out by the blue path line).
For the sake of having a more detailed look at the current price movements, pasted above is the 4-hour time. Price is in a range formation between the red and green areas, but we have reason to believe momentum is being gathered for a big move. Keep an eye out.
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Dominic Jubemi is primarily into legal practice. However, he has taken interest in building and grooming fundamental skills in FX and Crypto trading, audio engineering and in the nearest future, fiction writing.