Cardano price to recover as ADA is held by critical support
|- Cardano price action sees bulls defending S1 monthly Support at $1.18.
- ADA price looks ready for a bullish signal, as it continues testing the red ascending trend line.
- Expect a rally that could quickly pop back up towards $1.80.
Cardano (ADA) price has been in a downtrend for over two weeks now and now bears are getting crushed against the monthly S1 support level for December, at $1.18. ADA bulls do not look like forfeiting this level as bears start to book profits and exit their positions. The Relative Strength Index (RSI) is quite close to being oversold suggesting a lack of scope for further downside. Today, a bullish candle looks to be forming that could match yesterday’s bearish candle if a tailwind in cryptocurrencies triggers some relief.
Cardano could see a U-turn
Cardano price is currently respecting the monthly S1 support level at $1.18, with bulls not giving way to bears who are attempting to push the ADA price in a further leg lower towards $1.0. Instead, short-sellers in ADA price action are fleeing the scene and booking profits as the RSI is trading very close to the oversold region again. Bulls are now taking control and could easily squeeze bears back up against the red ascending trend line that rejected price on Monday at around $1.35.
ADA price could enjoy some tailwinds from global equity markets which are enjoying positive sentiment again this morning during the European session, sentiment looks to spillover into cryptocurrencies. In case bulls can make a close above the red ascending trend line, expect a further lift and test against the black descending trendline. If bulls further squeeze bears out of their positions, expect a possible punch-through effect that could see ADA prices explode to $1.90 or even $2.0.
ADA/USD daily chart
A few risk elements should not be forgotten, such as the fact that several major central banks are coming out with their forecasts for 2022 and are reassessing their monetary policy stance. Expect hawkish tones to spark headwinds for cryptocurrencies, with ADA price probably rejected around $1.50, on that black descending trend line and keeping alive the downtrend further into December. ADA price would stay capped and start to trade further to the downside, breaking through the monthly S1 support level at $1.18. A penetration of that level would propel into a spiral move towards $1.0.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.