• Cardano price could trap a number of short-sellers anticipating a major price collapse.
  • Extremely oversold on the weekly chart with historical lows in some oscillators.
  • Downside risks remain the most likely to occur.

Cardano price continues to trade lower but has trade opportunities on both sides of the market. A breakdown below the current support level may only yield a short-term price collapse before a massive rally begins.

Cardano price faces a major uphill battle but is better positioned than most for a surprise rally

Cardano price has a possible long entry on its weekly chart. The theoretical long entry is a buy stop at $1.33, a stop loss at $1.20, and a profit target at $3.00. Cardano must close at or slightly above the $1.33 entry level for the entry to be valid.

ADA/USD Weekly Ichimoku Chart

If the entry level triggers, it would be a very significant bullish event because that would position Cardano price above the 38.2 Fibonacci retracement, the top of the Cloud (Senkou Span A), and the 2021 Volume Point Of Control. Factors contributing to this theoretical long entry are the Relative Strength Index (RSI) near the first oversold level at 30 and the Composite Index at historical lows.

On the short side of the market, Cardano price has a hypothetical entry on its daily chart with a sell stop order at $1.19, a stop loss at $1.25, and a profit target at $1.00. The entry can only occur if there is a daily close at or slightly below the $1.19 price level. The short entry is based primarily on the head-and-shoulders pattern present on the Composite Index.

ADA/USD Daily Ichimoku Chart

Cardano price action is in a mixed situation when developing a clear directional bias. The trend on the daily chart is clearly bearish, but shows signs of exhaustion. On the other hand, the weekly chart is clearly bullish but is showing signs of converting into a bear market. One thing that is consistent on the daily chart is the shared support zone of 30 in the RSI and one other oscillator on each time frame showing extreme oversold conditions.

 

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. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Cryptos feed Join Telegram

Recommended content


Recommended Content

Editors’ Picks

Binance Coin: This level stands between BNB price and $450

Binance Coin: This level stands between BNB price and $450

Binance Coin price faces a decision as it knocks on the doors of significantly stacked resistance barriers. Clearing these blockades is the only way BNB can trigger a swift run-up to important levels.

More Binance Coin News

Why MATIC price is setting the scene for a blowout

Why MATIC price is setting the scene for a blowout

Polygon (MATIC) price has had difficulty finding a supportive floor for bulls to get a foot in the door and price action moving higher. Now, however, a floor looks to have been identified at $0.62, with price action consolidating just above. 

More Polygon News

The last time this happened Shiba Inu price exploded

The last time this happened Shiba Inu price exploded

Shiba Inu price is stuck trading inside a range for nearly two weeks and shows signs of exploding soon. Interested investors can ride this wave, which is likely going to be volatile and quick.

More Shiba Inu News

Why renowned technical analysts believe Bitcoin price has bottomed out

Why renowned technical analysts believe Bitcoin price has bottomed out

Bitcoin price has been dominated by bearish sentiment recently, but the BTC trend might be nearing a turnaround. Several leading analysts in the crypto community are arguing that Bitcoin price action has developed in a more irregular manner over the years and diminishing “cycles” imply Bitcoin has bottomed out. 

More Bitcoin News

Bitcoin: The last rebound before capitulation

Bitcoin: The last rebound before capitulation

Bitcoin is showing bullish signs in the lower time frames, which can be taken advantage of by traders in the next couple of days. But looking at BTC from the higher time frames suggests that the bottom is not in yet.

Read full analysis

BTC

ETH

XRP