Analysis
Cardano breaks its downtrend convincingly, to reach $1.45 but could this be next
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Journalist
Cardano formed a base of support at the $1.2 level over the past two weeks and broke past the $1.3 area that had offered the price a lot of resistance recently. This move also saw a longer-term trendline resistance, stretching back to early November, broken.
Technical analysis showed ADA to have strong bullish momentum on lower timeframes as the year drew to a close, although social media presence and sentiment were a bit bleak.
ADA — 1-hour chart
Source: ADA/USDT on TradingView
The downtrend (white) was broken and retested convincingly, and the pocket of former, short-term supply was also flipped to demand. The 21 SMA (orange) crossed over above the 55 SMA (green) on the hourly chart to show strong bullish momentum.
Fibonacci retracement levels plotted for ADA’s move from November highs at $2.378 to December lows at $1.188, showed that the 23.6% and 38.2% retracement levels are significant levels for the price to climb past. ADA has already tested the $1.469 level and could form a higher low and climb past it soon.
Bitcoin will indeed have a say in ADA’s price movement. If Bitcoin manages to stay above the $50k mark over the next few days, it could allow ADA the time to run to $1.64.
Rationale
Source: ADA/USDT on TradingView
The Visible Range Volume Profile showed the Point of Control to be at $1.3, a level ADA has climbed above, on strong volume. The A/D line also formed a series of higher lows over the past week but has not yet breached the month’s highs.
The Awesome Oscillator registered red bars in recent hours but was still well above the zero line. The price has already seen a minor dip to test buyer strength at $1.42, and another dip to $1.4 can not be ruled out. A safe bet would be to wait for the $1.47 level to be flipped to support before buying.
Conclusion
Cardano has picked up steam over the past week on the charts. Even though the price had significant resistance between $1.3 and $1.45, buyers were able to push the prices higher relatively quickly. This indicated bullish strength.
Bitcoin has also been bullish, although this could change when it nears the $53k-$54k zone. Hence, any ADA buys would need to be carefully monitored as BTC could adversely affect it.
