- 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.
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.