• Cardano price was able to close above a critical support zone on Monday, reducing fears of a bearish continuation move.
  • 18% rise expected as ADA moves towards its first primary resistance cluster.
  • Downside risks remain but are likely limited.

Cardano price experienced a nice jump higher on Monday, closing the session with a 5.5% gain. Concerns about crossing and staying above the Kijun-Sen continued until almost, literally, the last minute of the daily candlestick. Bulls have one more nearby resistance level before ADA would likely move towards $1.30 – the primary resistance level on its chart.

Cardano price action must close at or above $1.15 to maintain the current bullish momentum

Cardano price action is likely setting up for a move to restest the critical resistance zone at $1.30. But before $1.30 can be tested, Cardano needs to move and close above the next Ichimoku resistance level on its daily chart: the Tenkan-Sen.

The Tenkan-Sen is the weakest level within the Ichimoku system and is more of an indicator of near-term momentum than a typical moving average. The slope of the Tenkan-Sen displays the strength of the current momentum, but it also acts as support and resistance. If bulls can push Cardano price to a close at or above $1.15, ADA will then be above the Tenkan-Sen.

From there, it is a relatively easy road to $1.30 – but that is where things become more complex. The level at $1.30 is the primary resistance cluster before Cardano price begins a new expansion towards new all-time highs. The $1.30 value area contains the 38.2% Fibonacci retracement, top of the daily Ichimoku Cloud (Senkou Span B), the extended 2021 Volume Point Of Control, and the weekly Tenkan-Sen. Above $1.30 is a wide-open expansion move with little in the way of Cardano moving back to the $3 level.

ADA/USD Daily Ichimoku Kinko Hyo Chart

However, downside risks do remain. Any daily or weekly close at or below $1.02 could trigger a flash-crash towards the 2022 lows near $0.91 and would likely extend even lower towards the 61.8% Fibonacci retracement near $0.78.

 

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