- Cardano price may close with the fourth Doji pattern in the last five weeks.
- A steady balance between market timers and long-term holders fills chart with contradictions.
- ADA needs institutional investor commitment to overcome 2018 high.
Cardano price is poised for a meaningful decline in the coming weeks in light of the price compression and significant overhead resistance.
Cardano price contradictions demand a willingness to make difficult investment decisions
ADA consolidated the rapid advance in 2021 in a textbook symmetrical triangle during February and March. It was activated last week but failed for the fourth time to hold a breakout above the 2018 high at $1.40. The failures above the all-time high of 2018 emphatically show long-term holders are using the level to liquidate positions.
Multiple failures in one direction more often than not result in sharp moves in the opposite direction, and that is the outlook for ADA. Speculators using a “buy the dip” investment approach this past weekend are going to be burned.
The first level of support for a decline is the confluence of the 38.2% Fibonacci retracement of the February rally at $0.94 with the March low at $0.95. Subsequent support is the 50% retracement at $0.81, yielding a 36% loss from the current price. If the losses rapidly accumulate, there is the potential to test the 61.8% retracement at $0.69.
ADA/USD weekly chart
To negate the bearish thesis, ADA needs to close above last week’s high at $1.57. It would signify that the previous overhead resistance has been overcome, and the altcoin is ready to leave the 2018 high behind. The 161.8% extension of the March correction is the first upside target at $2.08.
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.