Cardano price is on the cusp of a 50% return for daredevils
|- Cardano price slips below the 55-day SMA but sees the price not tanking sharply.
- ADA price has bulls coming in and buying at a discount.
- Expect to see buy-side volume exploding on Monday and over the weekend as investors await a calm period.
Cardano (ADA) price looks to be on the cusp of booking a third consecutive losing streak. But under the hood, the Relative Strength Index (RSI) reveals that bulls are pushing against and are buying on the dips in a fade-in trade. With that buying, bears are getting disappointed. With more calm periods around the corner, as FED officials enter a blackout period and this weekend erases another tail risk that is dragging on ADA price, it offers room for upside.
ADA price is currently in a 1-to-4 ratio trade
Cardano price slipped earlier this week below the 55-day Simple Moving Average (SMA) at $0.976. Although this is to be conceived as a bearish signal, bulls are cathing the drops and are refraining from price action from dropping below $0.80. That is being proven with the RSI not dropping further but rather flatlining, showing that there is buying happening when bears are trying to push to the downside.
ADA price is thus setting up for a bullish breakout where the demand side will outweigh the sell-side pressure anytime soon. Investors that would jump in now need to place their stop behind a firm safety level, near $0.715, giving up 0.20$ on the stop loss. But to the upside, pop back to $1.637 is set with already two failed tests and a double top back in January and December, making it a 1-to-4 ratio trade which is very profitable.
ADA/USD weekly chart
As mentioned at the beginning of the article, the rejection of the 55-day SMA on the topside could be the level where bears added even more short positions, and the buy-on-dips will be a measure for nothing from the bulls. Expect bulls to be squeezed out towards $0.7150, and in case that level breaks, a sharp nosedive move to $0.4150 a severe catalysts shakes markets upside down. That could come from an unforeseen move from Russia in Ukraine or Le Pen winning the French elections on Sunday.
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