Cardano [ADA] bounces from range lows; here are targets to sell coin at
Disclaimer: The findings of the following analysis are the sole opinions of the writer and should not be considered investment advice.
Cardano [ADA] flipped XRP in terms of market capitalization to stand at $17.15 billion at the time of writing. The trading volume saw a significant spike a couple of days ago, but averages around $600k a day, according to CoinMarketCap. Since June, Cardano has formed a range between $0.44 and $0.64.
Last week, ADA dipped beneath the range lows for a brief period, before rising higher once more. While the structure was not bullish on the price charts, it appeared that Cardano could register some more gains over the next week or two.
ADA- 1-Day Chart
The aforementioned range was highlighted in white. The mid-point of the range sat at $0.54. This value has served as resistance in July and August and added credence to the plotted range. The mid-point and the range highs are obvious resistance zones.
Therefore, longer timeframe traders can look to book profit in the $0.55 and the $0.65 zones. On a lower timeframe, the $0.49-$0.5 region can act as support. A retest of this area can be used to buy ADA, with take-profit targets at the $0.53-$0.54 belt.
Overall, the price continued to trade within the range. Unless a breakout and retest of the range extremes occur, a trader need not anticipate a breakout. Instead, they can look to trade within the range.
The Relative Strength Index (RSI) on the daily timeframe leaped from 40 to 56 over the past couple of days. This showed the bullish momentum had resurfaced. Yet, since June, the RSI has not really been able to break past the 40 or 60 values.
Therefore, there was a lack of strong momentum and a lack of a definite trend. This idea supported the formation of a range.
The Directional Movement Index (DMI) did not show a strong trend either. The ADX (yellow) and the +DI (green) were just above the 20 mark, but this was not indicative of a healthy uptrend.
On the other hand, the On-Balance Volume (OBV) showed steady and significant demand for ADA in recent weeks.
In fact, the OBV formed a series of higher lows in recent weeks. This evidenced strong buying pressure and indicated a move upward could be likely.
Bullish sentiment would need to be tempered. Cardano could be heavily influenced by Bitcoin [BTC]. Bitcoin held on to the $19.6k-$19.8k region. A move past $20.4k for BTC could aid ADA’s surge higher.