Cardano price screams “buy” ahead of bullish breakout
- Cardano price is coming off of a very bullish weekly close from last week.
- Traders could return ADA into the weekly Cloud, staving off further selling pressure.
- Bulls now eye the next primary resistance level to test at $1.50.
Cardano price action has been extremely bullish over the past two weeks. From the January low at $0.92 to the most recent high at $1.26, Cardano has gained an impressive 37%. The recent pullback from $1.30 has not resulted in a bearish continuation move. Instead, a new buying opportunity has been presented.
Cardano price readies for a breakout above $1.30 to test $1.50
On the weekly Ichimoku chart, Cardano price needs to remain above the bottom of the Ichimoku Cloud to stay away from any further bearish outlook. That means it will need to close this week at or above the $1.32 value area, which means closing above the weekly Tenkan-Sen at $1.28 and the 38.2% Fibonacci retracement at $1.32. Failure to do so means Cardano will open candlestick below the Cloud the following week – an ominous and bearish signal.
ADA/USD Weekly Ichimoku Kinko Hyo Chart
However, the $0.02/box Point and Figure chart presents a very bullish outlook with some expansive upwards price movement coming soon. Cardano price recently converted into a bull market after bulls pushed ADA past the bear market trend line (red diagonal line) at $1.18. The current O-column is the first pullback after converting into a bull market. In Point and Figure analysis, that first pullback is viewed as a sign of strength, not weakness. It also represents opportunity.
The theoretical long entry is a buy stop order at $1.20, a stop loss at $1.12, and a profit target at $1.58. This trade setup represents a 4.75:1 reward/risk. It is based on the entry after a Pole Pattern reversal. The entry is on the three-box reversal of the current O-column. So, as price moves lower, the entry and stop-loss move in tandem, but the profit target remains the same.
ADA/USD $0.01/3-box Reversal Point and Figure Chart
The profit target is based on the Vertical Profit Target Method in Point and Figure analysis but will more probably be halted near the critical and psychological price level of $1.50. The theoretical long entry is invalidated if the current O-column returns to the $1.08 value area. Cardano would likely be in the throws of a new bear market in that scenario.
Author
Jonathan Morgan
Independent Analyst
Jonathan has been working as an Independent future, forex, and cryptocurrency trader and analyst for 8 years. He also has been writing for the past 5 years.
