UseTheBitcoin Market Update | July 12th, 2024

Let’s examine the insights shared by our Technical Analyst at UseTheBitcoin as he walks us through his personal trading approach and observations on Cardano (ADA).

Daily Timeframe Analysis

On a daily timeframe, it might seem like not much is happening with ADA. However, you will notice something interesting when you look closer at the Relative Strength Index (RSI) at the weekly timeframe. 

The RSI is approaching the neutral level, around 50. Historically, every time the RSI crosses above this level, it indicates increasing buying momentum. This means that prices could rise shortly after such a crossover.

Riding The Swings

While Cardano may not be suitable for long-term holding, taking advantage of these potential swings is still possible. Traders who monitor these RSI levels can potentially enter and exit trades to capitalize on short-term price movements.

Bullish Divergence

If you examine the RSI on a daily timeframe, notice that it is moving upward even as prices are declining. This situation is known as a bullish divergence, often preceding price increases. A bullish divergence occurs when the RSI makes higher lows while the price makes lower lows, indicating that the selling pressure is weakening and a reversal to the upside might be imminent.

Key Support Level

Moreover, you will also observe a significant pattern if you zoom out and examine the $0.40 price level. Historically, every time ADA’s price reaches this level, it tends to rebound and move higher. Currently, ADA is again at the $0.40 mark.

The big question now is: Will history repeat itself, and will the price rise again? Only time will tell.

Final Thoughts

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