- Cardano price forming complex price pattern, despite recovering the strategically important 200-day simple moving average (SMA), now at $1.16.
- The range of $0.90-$1.00 has been superior support for the last five months, preventing a monthly close below the psychologically important $1.00.
- ADA has registered the best 4-day gain since June but still lags earlier moves in the year.
Cardano price discovered support at the lower trend line of a symmetrical triangle on July 21, resulting in a solid 4-day gain of 15.29%. Still, ADA has failed to extend the rally beyond the initial spike on July 21. The lack of traction does raise a red flag for the rebound and the potential for the cryptocurrency to crack the intimidating resistance between $1.30 and $1.40. Nevertheless, it is the last stage of a complex price pattern.
Cardano price raises the stakes, puts investors on alert
Over the last six days, ADA has overcome the support projected at the 200-day SMA at $1.14 and the triangle’s lower trend line, then at $1.05, before striking the critical $1.00 and registering an oversold condition on the daily Relative Strength Index (RSI).
The following four days have generated a 15.29% gain at writing, lifting Cardano price above the 200-day SMA. Still, momentum has quickly waned, putting bullish ADA projections of a breakout to the upside from the symmetrical triangle in doubt.
ADA/USD daily chart
However, the symmetrical triangle is the conclusion of a complex price pattern, taking the formation of a diamond that began in February. A diamond pattern is rare, but it can be powerful. The measured move of the ADA diamond pattern is 65%, projecting a downside price target of $0.36, while the upside target is $2.11 from the breakout above the triangle’s upper trend line.
Statistically, the percentage of the downside breakouts reaching the price target is 63%, and it is 65% on the upside. The percent that breaks to the downside is 54%. The pattern is not activated until there is a good daily close below or above one of the ADA trend lines.
Looking at the support and resistance levels of the Cardano chart structure, it is clear that the fulfillment of the measured move targets will face tremendous resistance. On the downside, there is the reinforced $0.90-$1.00 range, a level that ADA has not closed below on a weekly basis since early February, despite several tests.
On the upside, Cardano price is confronted by the union of the 2018 high at $1.40 and the 10-week SMA at $1.41.
ADA/USD weekly chart
At this point, it is critical to let the ADA diamond pattern trigger and not get caught in the fluctuations of the concluding symmetrical triangle. Either way, Cardano price has the potential to deliver a 65% return.
Conclusively, Cardano price has raised the stakes with the diamond pattern, but until it activates on a daily closing basis, ADA remains a diamond in the rough.
Here, FXStreet's analysts evaluate where ADA could be heading next as it seems bound for higher highs.
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.
Recommended Content
Editors’ Picks
XRP price extends losses on Tuesday, risks decline below support at $0.60
XRP price dropped closer to its psychologically important support level at $0.60 on Tuesday amidst a steep correction in the crypto ecosystem. Most of the top 30 cryptocurrencies by market capitalization have noted a decline in their prices on March 19.
Avalanche price could rise 20% on gaming narrative ahead of GDC conference
Avalanche is an outlier on Monday, rallying while the broader market crashes. It has outperformed Bitcoin price, as well as meme and AI crypto coins, sectors that have been thriving of late. AVAX’s good fortune comes ahead of the Game Developers Conference.
Bitcoin price shows weakness, but new BTC whales have created solid support at $56,400
Bitcoin downside momentum strengthens, giving sidelined and late bulls a chance to buy the dip. The market remains focussed on the oncoming halving, expected to kick off the next bull cycle.
Crypto AI token rally persists, ignited by NVIDIA AI conference
NVIDIA AI conference, starting on Monday, is considered a key AI event as market participants await the unveiling of the next AI chip, B100. NVIDIA’s influence extends to the mining sector in crypto as its chips are focused on high-performance GPUs.
Bitcoin: Can BTC hit $100,000 without a correction?
Bitcoin (BTC) price shows a slowdown in momentum as it set up a new all-time high of $73,949 on March 13. Considering the massive uptrend that BTC has been experiencing, a short-term correction is nothing to be concerned about.