- Cardano price consolidates after a 5% rally and shows potential for a bullish cross of two significant moving averages.
- ADA could be setting up a rally toward the $0.430 zone.
- The invalidation of the bullish thesis is $0.385.
Cardano price has been showing signs of a continued bullish trend after a spike on January 17. As the market consolidates, traders should keep a close eye on the smart contract token for a profitable trade.
Cardano price signal caution for traders
Cardano price is going into a weekend consolidation after a 5% rally on January 17. The last-minute spike was catalyzed by the support of both the 8-day exponential and 21-day simple moving average. At the time of writing, the indicators are coiling and set to produce a bullish cross. If the cross manifests, the Cardano price could rally towards higher targets.
Cardano price currently hovers at $0.450. The Relative Strength Index (RSI) suggests that caution should be applied when aiming for higher price levels as this week's swing high at $0.420 shows divergences with the previous upswings near the $0.400 barrier down towards the $0.300 zone. This could be an early signal of a market reversal, but traders can only identify this in hindsight of a downward move.
Considering these factors, healthy risk management should be applied but maintain a bullish thesis. The next target for bulls to aim for would be the $0.430 zone, resulting in a 9% increase from Cardano's current price.
ADA.USDT 1-Day Chart
Invalidation of the bullish thesis is currently below the swing low above the coiling moving averages at $0.385. This will enable traders to make bullish moves while keeping their risks exceptionally low. If the invalidation point is breached, traders can expect a decline as low as the $0.300 zone to challenge the RSI's origin point of the divergence. Such a move would result in a 25% decrease from Cardano's current market value.
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