• Cardano price wedges higher after locating firm support at the 2018 high.
  • 61.8% Fibonacci retracement of the ADA May correction now playing the role of resistance.
  • Four-hour chart highlights a potential Golden Cross of two important moving averages.

Cardano price emerged from a descending channel on May 30 with a 9% four-hour candlestick, spiking ADA from below the 2018 high to the 61.8% retracement of the May correction. The advance has lacked impulsiveness, suggesting that the green token may need another pullback to engineer the price thrust required to lift the cryptocurrency to the all-time high.

Cardano price engaging bullish investors, but lack of emotion keeps gains limited 

To review, Cardano price released from an inverse head-and-shoulders pattern on the four-hour chart on May 25. Still, it quickly faded under the dominant weakness in the cryptocurrency complex, thereby cutting below the right shoulder on May 29.

Following the failure of the inverse head-and-shoulders pattern breakout, the pullback designed a descending triangle, pulling Cardano price below the critical 2018 high at $1.39. ADA finally rallied through the channel’s upper trend line and above the 200 four-hour simple moving average (SMA) on May 30.

The 40% rebound from below the 2018 high to today’s high at $1.89 can be described as corrective, lacking the commitment and emotion that underpins impulsive rallies and suggests that Cardano price may need to refresh the recovery with a mild pullback, maybe to the key intra-day moving averages or lower.

The joining of the 50 four-hour SMA with the 200 four-hour SMA creates substantive support at $1.65-$1.67 and puts them on the path to register a Golden Cross on the four-hour chart. A Golden Cross occurs when the faster-moving average rises above the slower-moving average.

Suppose Cardano price takes on the personality of impulsiveness. In that case, ADA will need to overcome the 61.8% retracement at $1.90 to initiate the rally to the all-time high at $2.51, yielding a 38% return from the current price.

ADA/USD 4-hour chart

ADA/USD 4-hour chart

An ADA close below the 2018 high on a weekly basis may press Cardano price to revisit the May 24 low at $1.23. Additional weakness would frustrate the bullish narrative and suggest the digital asset is entering an alternative scenario that may include a test of the May 23 low.

ADA is a compelling story and only trades 38% below the all-time high at the time of writing, putting it in a comfortable position to lead the cryptocurrency market higher in the months ahead.

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

Bank of America bullish comments on metaverse push Axie Infinity and Sandbox closer to breakout

Bank of America's strategist made bullish remarks about the metaverse, triggering a spike in interest in Axie Infinity and Sandbox tokens. The rices of the two metaverse tokens continue climbing with increased interest from investors. 

More Axie Infinity News

Polkadot price ready to breakout after DOT forms double bottom

Polkadot price began turning around and moving higher on November 28. It is currently resting on support after a brief pull-back, with the potential for using this floor as a launchpad higher. A resumption of the bullish impulse will provide fresh confirmation for the new uptrend.

More Polkadot News

Bitcoin Weekly Forecast: The bull and the bear case for BTC

Bitcoin price saw a recent bullish impulse that faced massive headwinds before it tagged a crucial psychological barrier. With directional bias and choppy price action, BTC is likely to experience massive volatility as the situation resolves over time. 

More Bitcoin News

Berkshire Hathaway’s Charlie Munger wants US to ban cryptos like China

Charlie Munger considers cryptocurrencies bad for people and backs China on its cryptocurrency ban.In his previous interviews, Munger has shed light on the concept of “speculative excess” and “asymmetry of wealth.” 

More Cryptocurrencies News

Cyber Monday 2021 Discounts!

Glued to your trading screen on Cyber Monday? Upgrade your skills by signing up for FXStreet’s Premium service, offered at a discount of up to 50%. Fellow traders have already taken advantage of Black Friday profits. What about you? 

Subscribe now!