• Cardano price closed last week with a Doji candlestick despite broader market weakness.
  • Weekly Relative Strength Index (RSI) shows a head-and-shoulders top.
  • Key moving average finally caught up to price.

Cardano price catapulted 9000% from the 2020 low to 2021 high, and the momentum carried the price beyond the all-time high set in January 2018. Over the last five weeks, ADA has been shaping a pennant pattern on the weekly chart. 

Cardano price could run immediately

A classic pennant is preceded by a straight-up price trend and is short in duration. It is a frequent formation with extremely rapid and relatively reliable outcomes. Following a breakout, prices tend to move immediately, with few pullbacks or throwbacks in either direction. 

If ADA shapes a pennant pattern, traders should be prepared for a sharp resolution over the next two weeks. Since the pattern is a continuation pattern, traders should lean their trading preparation toward an upside breakout. 

ADA needs to clear the topside trend line at $1.47, and it should be with compelling underlying volume. Upside targets begin to emerge at the 1.618 Fibonacci extension level of the February-March decline at $2.08, followed by the 2.618 extension level at $3.39 and then the 3.618 extension level at $5.50. The big level is the 1.382 extension level of the 2018-2020 bear market at $7.55.

ADA/USD weekly chart

ADA/USD weekly chart

Failures do occur, and traders should turn their sights immediately to the 10-week simple moving average (SMA) at $1.00, a significant psychological level. If that happens, look for the RSI to break the head-and-shoulders top’s neckline, thereby raising the stakes.

This failure could turn ugly below the 10-week SMA as the next support does not materialize until the 0.236 retracement level of the 2020-2021 bull market at $0.53. If the decline continues, and after a few heart palpitations, Cardano price should firm at the 40-week SMA at $0.36, representing a 70% loss from the current price.

 

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.

Cryptos feed

Latest Crypto News


Latest Crypto News & Analysis

Editors’ Picks

Experts say Ripple will win SEC lawsuit, which might propel XRP to new all-time highs

Since XRPArmy and lawyers in the crypto ecosystem consider the US Securities & and Exchange Commission’s (SEC) move to pull documents out of public view as evidence that the case is coming to a close, a Ripple win appears more likely.

More Ripple news

Bitcoin Weekly Forecast: BTC must hold $45K to target new all-time highs

Bitcoin price is on a rollercoaster ride as it crashed violently on September 7, consolidated for a few days after that and went on an uptrend to undo the losses. Over the past 24 hours, however, BTC seems to be consolidating for a volatile move without a clear directional bias.

More Bitcoin News

Chiliz price to retrace before CHZ runs up

Chiliz price is stuck in a tight consolidation above a crucial support floor and shows no signs of recovering from this slump. In fact, CHZ might retrace lower before heading on an uptrend.

More Chiliz News

ICX Price Prediction: ICON prepares for 20% descent as bulls fade away

ICON price looks ready for a swift downswing after an explosive run over the past ten days. The crypto markets’ slowdown after the recent run-up makes this bearish scenario a perfect fit. Going forward, investors can expect ICX to head lower and retest stable support barriers.

More Cryptocurrencies News

BEST CRYPTO BROKERS/EXCHANGES



Bitcoin Weekly Forecast: Markets revert to mean, but BTC price remains indecisive

Bitcoin price shows considerable strength after springing from the recent crashes. Still, it is uncertain whether the current bullish impulse will morph into a new uptrend or lead to a more profound decline.

Read the weekly forecast

BTC

ETH

XRP