Cardano buy-side volume rises as momentum builds for ADA to breakout
- Cardano price has been stuck in a sideways bandwidth since the end of September.
- The RSI shows that buy-side volume is picking up as the index crosses 50 to the upside.
- With all the favorable external tailwinds, expect a breakout trade to happen with bulls targeting $2.74 in the first phase.
Cardano price has been stuck in a ditch for most of October as price action ranged between $2.0 and $2.4. Neither bulls nor bears could take control as both defended their support or resistance levels quite adequately. The Relative Strength Index (RSI) has crossed above 50 again, proving buy-volume is picking up, and a breakout trade looks set to break $2.40 and target $2.74.
Cardano price to start uptrend to $3.16
Cardano price has seen quite some pickup in buying volume after the range trade for most of October. With the RSI picking up steam back above 50, it looks like bulls are ready to make another run at $2.40. It would be the third test of that level, and it looks more than likely to break this time.
ADA price sees bulls with more momentum in their corner, aided by the current positive wave in cryptocurrencies and some tailwind spillover effects from the Nasdaq, Tesla and Elon Musk. These should propel bulls above $2.40 in a breakout trade and start an uptrend towards $2.74. As long as ADA price offers enough entry points for fresh buying and small profit-taking, expect it to not take long before bulls knock on $3.16 and make new all-time highs.
ADA/USD daily chart
With that said, as the uptrend depends on quite some external positive elements, a fade or turnaround of those tailwinds could easily provide a headwind for ADA price. Should that be the case, expect a return towards the lower end of the bandwidth near $2.00 with a possible retest of $1.90. Should sentiment completely turn back to risk-off, expect a dip towards $1.67 in the near term.
Author
Filip Lagaart
FXStreet
Filip Lagaart is a former sales/trader with over 15 years of financial markets expertise under its belt.
