Sheldon McIntyre, CMT
Independent Analyst
- Cardano price continues to surprise to the upside.
- ADA came within 1% of the all-time high today.
- Relative Strength Index (RSI) still held around 50 despite the 30% correction.
Cardano price breakout from a small double-bottom base has increased the odds that ADA is on the verge of continuing the impressive advance of 2021.
Cardano price combines power with volume support
Speculative assets, particularly cryptocurrencies, are capable of rapidly advancing. Over the last three days, Cardano has rallied 40% at today’s high and was kickstarted by the 21% breakout on Monday following news that Coinbase Pro will support the token against four trading pairs.
Interestingly, during the ADA price correction in the first half of March, not one negative day closed on above-average volume. Investors were not rushing to the exits. Instead, the decline was precipitated by a technical reaction to the negative momentum divergence built on February 20.
Cardano price breakout from the double-bottom base has shifted investors’ attention to the all-time high and, more importantly, to potential targets in the coming days and weeks. This scenario’s profit targets are drawn at the 1.382 Fibonacci extension level at $1.68, followed by the 1.618 Fibonacci extension level at $1.79.
The more ambitious target is the 2.618 Fibonacci extension of the March base at $2.29, representing a 50% gain from the all-time high at $1.49.
ADA/USD daily chart
Today’s rejection near $1.49 does dampen exuberant Cardano investors’ projections for a quick breakout into new highs. Some risk management needs to come into play, and the first support level is the double bottom trigger at $1.22.
After that level, the next support level doesn’t emerge until the base low at $0.99, followed by the 50-day simple moving average (SMA) at $0.93.
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