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07/11/2022

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Cardano: These levels could determine ADA’s recovery prospects

The post Cardano: These levels could determine ADA’s recovery prospects appeared on BitcoinEthereumNews.com. Disclaimer: The findings of the following analysis are the sole opinions of the writer and should not be considered investment advice. For over a week, the...

Cardano: These levels could determine ADA’s recovery prospects

Disclaimer: The findings of the following analysis are the sole opinions of the writer and should not be considered investment advice.

For over a week, the one-month trendline resistance (white, dashed) and the 50% Fibonacci level have created a stiff buying hurdle. As a result, Cardano’s [ADA] flip from the $0.48-level aided the sellers in imposing an ascending broadening wedge breakdown.

The broader outlook exhibited bearishness, especially after ADA failed to sustain above the 20/50/200 EMA in the 4-hour timeframe. A continued plunge from the pattern could pull the alt to retest its long-term support. At press time, ADA was trading at $0.4549.

ADA 4-hour Chart

Source: TradingView, ADA/USDT

As the 20 EMA (red) fell below the 50 EMA (cyan), the near-term narrative for the altcoin took a bearish stance. The trendline resistance has shunned the recent bullish efforts to reclaim critical support levels.

Further, the price action saw a break below the broadening wedge whilst the EMAs still looked south. A consistent bearish pull could help the sellers retest the $0.43-$0.44 range in the coming sessions. 

However, the price action now entered into a relatively high liquidity region. So, an inability to inflict a robust bearish, or bullish move could extend the sluggish phase on the chart.

With the rejection of higher prices evidenced by a bearish hammer, the bears could steer the near-term trend. An immediate buying resurgence above the Point of Control (POC, red) could shun the bearish tendencies. Here, the trendline resistance could constrict the bullish efforts.

Rationale

Source: TradingView, ADA/USDT

The Relative Strength Index took a bearish outlook hovering below the 41-resistance. A breach above this support could aid the buyers in easing the selling pressure.

Further, the OBV marked higher troughs over the last week and affirmed a slight increase in buying vigor. However, the price action marked lower lows during this time. So, any reversals on the OBV could confirm a bullish divergence.

Nevertheless, the Directional Movement Index (DMI) exhibited a bearish stance. But the ADX of ADA revealed a weak directional trend.

Conclusion

With sellers finding a break below the pattern and the bearish crossover on the EMAs, ADA could continue its bearish movements. But the indicators exhibited mixed signs in the 4-hour timeframe. The targets would remain the same as above.

Finally, traders/investors should keep a close watch on Bitcoin’s movement and its effects on the wider market to make a profitable move.

Source: https://ambcrypto.com/cardano-these-levels-could-determine-adas-recovery-prospects/

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