Analysis
ADA struggles to break $0.365, here’s where traders can look to buy
Disclaimer: The findings of the following analysis are the sole opinions of the writer and should not be considered investment advice
- A lower timeframe resistance zone has been flipped to support
- Cardano faces stiff resistance up to $0.4, and demand has not yet arrived
Cardano has performed somewhat well in the past three days. The drop beneath $0.34 last Friday was followed by a short-term rally over the weekend.
Here’s AMBCrypto’s Price Prediction for Cardano [ADA] in 2022
At press time, Cardano sat atop the $0.35 zone of support. Even though the momentum was bullish on the lower timeframes, there was a lack of buying pressure in recent days. Can the rally continue
, or will it reach its zenith soon when the sellers step in?Liquidity pocket offers interim support as ADA bulls try to drive prices higher
The higher timeframe charts such as 1-day showed the trend to be bearish. After the move beneath the $0.44 former range lows and the $0.4 support level as well, the bias was strongly bearish.
The technical indicators and price action showed a bullish bias on the lower timeframes such as 1-hour. A visit to the $0.33 support saw a sharp reversal for Cardano. Demand also picked up, and at the time of writing ADA bulls fought with the sellers to drive prices above the $0.36 level.
Highlighted by the white box, a pocket of liquidity at $0.355 was flipped to a support zone in recent days. Just above this zone was a short-term bullish order block, demarcated by the cyan box.
Both of these areas were quite close to the $0.358 level, which was the 78.6% Fibonacci retracement level (yellow).
The RSI has been above the neutral 50 mark as ADA climbed back above the $0.34 mark, and showed short-term bullish momentum. The series of higher lows and higher highs in the past three days also supported the idea of an upward trend.
Yet, the OBV did not show a sharp advance. It struggled to break above the resistance from the past week. This was an indication that, despite short-term bullishness, the buying pressure was not necessarily strong.
Open Interest is slowly on the rise as sellers march onward
Since mid-September, the Open Interest on Cardano futures has been on the rise. At the same time, the price has been in a downtrend from the $0.48-$0.45 territory.
This suggested that short-sellers continued to have confidence in the downward trend and were likely opening short positions along the way.
The price might need to form a range to signal a shift in the longer-term trend. The previous one from $0.64 to $0.44 lasted for nearly five months before breaking out to the south.
