Cardano (ADA) Technical Analysis: Crunch-time For ADA, Will it Finally Break $0.05?
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Altcoin season seems to be underway today, as a number of cryptocurrencies decouple away from the sliding Bitcoin market and record positive gains. Out of the top 20 cryptocurrencies by market capital, Cardano is standing out as one of the best performers over the last 24hrs. So far the asset has managed to secure a promising 5.43% against the US dollar and pull ahead of Bitcoin by 5.34%.
Right now ADA is tantalisingly close to retesting the psychological $0.05 mark (0.786 fibonacci level), which has been a long-standing resistance for the asset as far back as November, 2018. If buyers succeed in breaking over this key level then it is likely that ADA will enter into a new bullish phase and begin reclaiming lost ground from 2018. However, if the asset fails to test the $0.05 mark for the second time, the price action will hit a bearish double top pattern and tumble back down towards lower support levels.
On the 1D ADA/USD chart we can see that the price action is just now starting to break bullish out of a reversal pennant pattern that it has been consolidating inside of for the last 3 months.
Overall, chart indicators appear to be favouring the buyers right now as the asset begins to approach its crucial resisting level, with bullish momentum and buying pressure showing a marked increase.
- On the Chaikin Money Flow there is a clear uptrend in buying pressure.
- On the RSI, the indicator line is now up at 60% and heading towards the overbought region at the 70% mark.
- The 12MA on the MACD indicator is spiking high above the 26MA, accompanied by increasingly bigger bullish candles on the histogram.
- Parabolic SAR dots have just started appearing beneath the price action.
- Candles are now closing high above the resisting kumo cloud on the Ichimoku indicator, although we are still waiting for a bullish T/K crossover.
- The Aroon Up line has bullishly converged with the Aroon Down line.
Should the price action break clear of the psychological level then the next main resistance will likely be at the 100% fibonacci retracement level at $0.0560. From there the 1.272 fibonacci level at $0.0639 will also likely present itself as a strong resistance in the short to mid-term.
If however, bears are able to overpower buyers during the second test - whether it be from auto-bot trades or panic sellers flooding the order books - then it is likely that the price action could return to the former downtrending resistance of the pennant pattern as a new support, to regain composure.
Cardano (ADA) Price Targets
All ROIs are calculated from the asset’s current value at $0.0487, at the time of writing (AToW).
Resistance 1: 0.786 fibonacci level/ $0.0500 (2.67%)
Resistance 2: 1.0 fibonacci level/ $0.0560 (14.99%)
Resistance 3: 1.272 fibonacci level/ $0.0639 (31.21%)
Support 1: Throwback support/ $0.0482 (-1.03%)