- Cardano price rises to a new monthly high at $0.389.
- ADA Is currently in an uptrend, but the technicals display mixed signals.
- A breach of $0.367 could become the catalyst of a larger decline.
Cardano price points higher but faces resistance in the process. Key levels have been defined to gauge ADA’s potential price trajectory in the coming days.
Cardano price presents a challenge
Cardano price continues to display bullish technicals as a new monthly high at $0.389 has been established on January 26. The 4% rise on the day brings Cardano’s total uptrend to a 60% rally since the start of the new year.
Cardano price currently auctions at $0.380. The recent uptick has enabled a hurdle above the 8-day exponential moving average. Still, bulls looking to join the trend should be cautious as the ADA price faces resistance from November's broken support zone at $0.39.
With such a small spread between key levels, traders may also want to adopt a trade-by-trade basis to avoid a larger backlash into lower support zones. The psychological $0.40 level will likely have an impact on the ADA price as well. The bullish scenario creates a potential 6% upswing from Cardano's current market value.
The Relative Strength Index, an indicator used to gauge the influence of market participants by comparing and contrasting previous rallies, shows mixed signals.
For instance, the bullish narrative on the RSI suggests Cardano is in a healthy uptrend because it has breached overbought territory past 80 and is producing higher highs above the previous resistance zone.
The bearish narrative however, shows a divergence between each ascending pivot point from $0.340, $0.375 and the new high at $0.389. Bearish divergence usually means an uptrend is due for a correction. If this is the case, the ADA price could fall as low as $0.28 towards the ascending trend channel that aided the initial stages of the 60% rally. The downside risk is 22% below Ada's current market value.
ADA/USDT 1-Day Chart
Considering these factors, risk management should be applied with a keen focus on detail. A second attempt at the 8-day exponential moving average at $0.367 could be the early stages of the anticipated decline.
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