Cardano price eyes an 18% rally after $2.5 million long liquidations
- Cardano price punished early bulls by collecting the sell-stop liquidity resting below the September 2 swing low at $0.448, hinting at a reversal.
- Now, investors can expect ADA to kick-start a recovery rally to the $0.505 hurdle.
- A daily candlestick close below $0.0435 will create a lower low and invalidate the bullish outlook for ADA.
Cardano price has been repeating this liquidity fractal pattern since June 18 and triggered one just a few hours ago. The fractal is simple and aims to collect the sell-stop liquidity before an explosive move to the upside.
As seen in the chart below, roughly $2.5 million worth of long positions were liquidated as ADA sliced below September 2 lows.
-637991580609492856.jpg)
ADA liquidations
Cardano price punishes bulls
Cardano price reversed shortly after creating the seventh liquidity run, which pushed ADA up by roughly 7%. This reversal knocked the altcoin below the September 2 swing low at $0.448, collecting the sell-stop liquidity and punishing greedy bulls.
The eighth liquidity run is yet to recover above $0.448 and produce a decisive close above it to confirm the start of a recovery rally. If successful, investors can easily expect ADA to retest the immediate hurdle at $0.472. Depending on the buyers’ strength, the altcoin could attempt a retest of $0.505 if the $0.472 hurdle is flipped into a support floor.
In total, this move would constitute a 12% ascent and is likely where the upside will be capped for Cardano price.
From a market makers’ perspective, ADA could extend to $0.530 to fill the imbalance or Fair Value Gp (FVG), bringing the total gain to 17%.
ADA/USDT 12-hour chart
While things are looking up for Cardano price, a failure to recover above $0.448 will be the first sign of weakness in the market. If ADA produces a lower low below the $0.435 level, it will invalidate the bullish thesis for ADA and potentially trigger a sell-off to July 13 swing low at $0.400.
Note:
The video attached below talks about Bitcoin price and its potential outlook, which could influence Cardano price.
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.
