Cardano poised for further gains this week but buyers must wait for this retest
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.
- The bias remained bullish for Cardano on the lower timeframes.
- Futures markets showed sidelined participants and some selling pressure.
On Sunday, Bitcoin saw a pump to $25.1k and an immediate rejection back to the $24.2k area. Whether to trust Sunday pumps in crypto or not remains debatable, but this pump caused early leveraged buyers some pain.
Coinalyze data showed $11 million worth of longs liquidated on the retracement of this move to $25.1k.
Read Cardano’s Price Prediction 2023-24
Cardano also saw a move upward of 2.4% late into Sunday, and a 5% drop thereafter. Since then, the price rebounded higher once more. What can lower timeframe traders expect over the next week?
A liquidity hunt to the south was witnessed late into Sunday
The 4-hour chart had a bullish market structure. On 14 February, ADA broke out past the $0.37 resistance and flipped the structure to bullish. Since then the price has formed a series of higher lows. In recent hours of trading, ADA dipped as low as $0.389.
This was still a higher low. To shift the H4 bias to bearish, a 4-hour session close beneath $0.389 would be required. In the meantime, the $0.414-$0.419 area was an imminent area of resistance.
The Awesome Oscillator showed that bullish momentum was weakening, owing to the red bars formed on its histogram. However, the indicator remained above the zero level. The A/D line also made higher lows over the past week. This suggested steady buying pressure.
Realistic or not, here’s ADA’s market cap in BTC’s terms
Over the past few days, trading volume has slowly dropped. At the same time, ADA bulls knocked on the doors of the resistance at $0.42.
Given the bullish structure, it was likely that a move upward was brewing. A breakout past $0.42 and a retest can be a buying opportunity.
Market participants remain neutral over the weekend
The Open Interest has fallen over the past week as ADA fought to climb above the $0.42 resistance.
This meant that a large share of participants was on the sidelines waiting for the market to make up its mind. The recent volatility did not see more than $200k worth of long positions liquidated. This suggested the liquidity hunt did not trap many buyers.
Contrary to the A/D line, the spot CVD line has sunk lower and lower over the past two weeks, to indicate selling pressure.