• Cardano price action develops a bullish continuation pattern on its Point and Figure chart.
  • Downside risks remain, but lows are likely in as buyers return.
  • Entry opportunity could yield a 40% gain.

Cardano price has suffered some intense selling pressure along with the rest of the market. However, the losses that Cardano has experienced have not been as extreme as many others.

Cardano price develops bullish entry setup

Cardano price has recently converted into a bull market on its $0.02/3-box reversal Point and Figure chart. The daily candlestick chart, however, continues to show weakness. That weakness has caused many weak hands to abandon Cardano and new short positions to open at the bottom. As a result, a spectacular bear trap is likely developing.

There is a hypothetical long entry opportunity for Cardano price. The long idea is a buy stop order at $1.42, a stop loss at $1.34, and a profit target at $2.00. This hypothetical trade setup provides a 7.25:1 reward for the risk. In addition, a trailing stop of two to three boxes would help protect any profit made after the entry is triggered.

The long entry assumes that a corrective wave has been fulfilled when price dropped to $1.34, fulfilling Wave 2 of an Elliot Impulse Wave. The 161.8% Fibonacci expansion of Wave 1 is at $1.98 – just shy of the $2.00 level. The projected profit target utilizing the Vertical Profit Target Method in Point and Figure is $2.00. Traders should look for Cardano price to face some selling pressure in that range.

ADA/USDT $0.02/3-box Reversal Point and Figure Chart

The hypothetical long idea is invalidated if Cardano price moves below $1.30. In that scenario, Cardano will likely return to bear market conditions with new setups targeting price levels below the $1.00 value area.

Note: All information on this page is subject to change. The use of this website constitutes acceptance of our user agreement. Please read our privacy policy and legal disclaimer. Opinions expressed at FXstreet.com are those of the individual authors and do not necessarily represent the opinion of FXstreet.com or its management. Risk Disclosure: Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.

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