ADA’s Rebound From The Past Two Days Could Trap Bulls
ADA’s rebound from the past two days could trap the bulls as previously It has seen sharp recoveries during bear markets that turned out to be exactly that so let’s read more today in our latest Cardano ADA news....
ADA’s rebound from the past two days could trap the bulls as previously It has seen sharp recoveries during bear markets that turned out to be exactly that so let’s read more today in our latest Cardano ADA news.
Cardano’s price climbed from $0.48 to as high as $0.68 marking a 45% rally in less than 48 hours but then ADA/USD failed to extend the rally and dropped by 13.75% from its high. Cardano’s price retreated and provided a portion of the gains secured in the previous two days so the question remains whether the ADA/USD pair can extend the recovery trend if it trades 80% below the September 2021 peak of $3.16. the downside retracement started after ADA tested the 50-day exponential moving average as a resistance level but the pair also moved lower in tandem with the market correction sentiment across riskier assets such as BTC and the S&P 500.
ADAUSD daily price chart. Source TradingViewThe Cardano tokens are risking another price correction and noted that ADA saw a sharp price rebounded in the past which turned into a bull trap adding:
“In March, we saw ADA go from south of $0.80 to over $1.24 in a couple of weeks. This, to me, looks like another fake-out.”
ADA’s rebound could pose to be a trap and a few factors support the bearish outlook. The FED will start unwinding the $9 trillion asset portfolio and create more headwinds for the risk-on assets. Dan Eye, the chief investment officer of Fort Pitt Capital Group said:
“I don’t think we know the impacts of QT [quantitative tightening] just yet, especially since we haven’t done this slimming down of the balance sheet much in history.”
ADAUSD hourly price chart featuring ‘bull pennant’ setup. Source: TradingViewFrom a technical perspective, Cardano can continue its recovery trend due to a bullish continuation pattern and ADA was consolidating inside was seems to be a bull pennant which was confirmed by the price that moved inside the triangle structure after a huge move to the upside dubbed “Flagpole.” as a rule, the bull pennant resolves usually when the price breaks above the upper trendline and increases by as much as the flagpole height. In other words, $0.77 bullish target is up by 25% from the June 1st price. ADA has been painting a similar bull pennant setup against BTC and raised the chances of the uptrend for the ADA/BTC pair in June so as a result, the ADA/BTC pair broke above the pennant upside trendline that can have its rise to $0.00002355 or up by 23% from the June price.
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