Cardano price coils up before ADA explodes 20%
- Cardano price slipped below the $1.01 support level, collecting liquidity and suggesting that a reversal is likely.
- The resulting uptrend eyes a retest of the weekly resistance barrier at $1.20 or a 20% ascent.
- A breakdown of the January 24 swing low at $0.951 will invalidate the bullish thesis for ADA.
Cardano price has been on a steady downtrend since January 18 from a short-term time frame. The recent move has slipped below a stable support level to collect liquidity. Therefore, investors can expect ADA to see a reversal in the coming week.
Cardano price eyes recovery
Cardano price set up a short-term local top at $1.26 on February 8 after rallying 25% in roughly a week. This run-up faced exhaustion leading to a steep correction to $1.01 and lower. The move collected liquidity, signaling that ADA is due for a reversal.
Therefore, investors can expect Cardano price to see a resurgence of buyers in the coming days. Although the $1.10 barrier might hinder this upswing it is not significant so, ADA is likely to continue going higher.
The $1.20 level has played a crucial role in setting up a higher high in January and is also a weekly resistance barrier. Hence, ADA will likely retest this level and set up a local top here. In total, this run-up would constitute a 20% ascent.
ADA/USDT 4-hour chart
While things are looking up for Cardano price, a Bitcoin-induced flash crash that pushes ADA to produce a four-hour candlestick close below the January 24 swing low at $0.951 will create a lower low.
This move will likely skew the odds in the bears’ favor invalidating the bullish thesis and triggering a potential move to the downside.
Author
Akash Girimath
FXStreet
Akash Girimath is a Mechanical Engineer interested in the chaos of the financial markets. Trying to make sense of this convoluted yet fascinating space, he switched his engineering job to become a crypto reporter and analyst.
