This is the ideal level to consider a bullish approach for Cardano’s ADA price
- Cardano price could be on the verge of a fractal that could potentially forecast a 40% to 55% upswing.
- For this bullish outlook to play out, ADA needs to drop to significant stable support levels at $0.401 and $0.380.
- A daily candlestick close below $0.380 will trigger a much-steeper correction for the so-called “Ethereum-killer”
Cardano price has not made huge progress since bottoming on May 12. The altcoin has been hovering just above this level and is likely to revisit it soon, especially if certain conditions are met.
Cardano price and its potential fractal setup
Since Cardano price bottomed around the $0.380 support level, local tops at $0.550, $0.628 and $0.689 were formed. From May 12 to May 30, ADA stayed below $0.550, after which, it spent a brief time between $0.550 and $0.628 between May 30 and June 11.
After a breakdown of $0.550, the altcoin struggled to reclaim the level and has remained glued to the $0.435 support level. However, the price action that transpired after June 13 seems to be forming a fractal.
ADA/USDT 4-hour chart
The fractal is simple and revolves around liquidity collection. The June 13 swing low at $0.435 was swept on June 19, resulting in a 21% ascent to $0.527.
The second liquidity run took place as the July 13 swing low swept the liquidity resting below July 1. This development was followed by a 26% upswing to $0.550.
The third liquidity event is likely going to occur as Cardano price sweeps below either the July 13 swing low at $0.401 or the May 12 swing low at $0.380.
Interestingly, both the liquidity events that have transpired so far have been around or below the oversold zone at 30. Hence, investors can check the Relative Strength Index (RSI) for secondary confirmation.
Potential gains from the resulting rally through a sweep of $0.401 or $0.380 would be between 40% to 55%.
ADA/USDT 4-hour chart
While this outlook for Cardano price is extremely optimistic, investors should exercise caution and take a cue from Bitcoin price before opening long positions for ADA. In the event that Cardano price produces a daily candlestick close below $0.380, the bullish thesis explained above will face invalidation.
This development could see ADA crash by 25% to reach the $0.278 support floor.
Author
Akash Girimath
FXStreet
Akash Girimath is a Mechanical Engineer interested in the chaos of the financial markets. Trying to make sense of this convoluted yet fascinating space, he switched his engineering job to become a crypto reporter and analyst.
