• Cardano price triggers a large symmetrical triangle pattern with yesterday’s close above the upper trend line.
  • ADA/BTC is nearing a critical support level with the intra-day Relative Strength Indexes (RSI) flashing a bullish momentum divergence.
  • ADA IOMAP metric shows one more barrier before the digital asset can march higher.

Cardano price has been shaping a symmetrical triangle pattern during the multi-month corrective process, with the July lows failing to trigger the formation on a daily close. ADA still encounters selling pressure below the 2018 high of $1.40, confirmed by the IOMAP metric, but beyond the intimidating resistance, there is an open zone for the cryptocurrency to climb. Moreover, the ADA/BTC pair indicates that Cardano price is closing in on renewed relative strength after a corrective period.

Cardano price refuses to fall, creates a trap

On July 20, Cardano price traded below the lower trend line of the symmetrical triangle with sights set on support layered from $1.00 to $0.90. Still, the cryptocurrency reversed the weakness to close above the trend line, creating a bear trap. 

Cardano price jumped 11% higher the next day off the oversold condition, kicking off a new rally that has consisted of six up days over the last seven days, highlighted by yesterday’s attempt to reclaim the critical 2018 high at $1.40. ADA struggled with the level in February, March and April before releasing in May with an 80% advance.

The measured move of the symmetrical triangle pattern is near 63%, signaling a Cardano price target of $2.01, putting ADA less than 30% away from the all-time high of $2.51 printed on May 16.

Resistance may persist around $1.40 in the short term, but an improving environment in the cryptocurrency complex offers a tailwind for the first time in two months.

ADA/USD daily chart

ADA/USD daily chart

Cardano price to begin a period of outperformance

Since the beginning of June, the ADA/BTC pair has been expressing a period of underperformance, taking it down near the February high of $0.00003198 and the first oversold reading on the daily Relative Strength Index (RSI) since the December 2020 lows.

On the intra-day charts, the ADA/BTC pair shows a bullish momentum divergence as the RSI is not printing a new low with price, indicating that downside momentum is dissipating.

The oversold reading on the daily chart, the compelling support of the February high and the emerging bullish momentum divergences on the intra-day charts combine to present a high probability opportunity to participate in a new period of outperformance for Cardano price versus Bitcoin, the flagship cryptocurrency.

ADA/BTC daily chart

ADA/BTC daily chart

Cardano price has one more challenge before blue skies

After a two-month correction, there are layers of resistance that are inflection points for a renewed uptrend. In the case of ADA, the IntoTheBlock In/Out of the Money (IOMAP) metric shows a notable range of resistance (out of the money addresses) between $1.31 to $1.35, where 188.87k addresses own 3.7 billion ADA at an average price of $1.33. The average price corresponds to the 50-day simple moving average (SMA), also at $1.33.     

A successful breakout above the cluster of out-of-the-money addresses frees Cardano price to reclaim the 2018 high of $1.40 as the size of resistance drops while the momentum should be building.

ADA IOMAP - IntoTheBlock

No recovery from a multi-month decline will be free of obstacles or bouts of selling pressure. Still, the bear trap suggests that the remaining weak holders have been removed, and Cardano price can engineer a sustainable rebound. Moreover, the ADA/BTC pair points to a new period of relative strength for the altcoin, perfect for overcoming the large layer of resistance around the 50-day SMA and marching beyond the 2018 high towards the measured move target at the psychologically important $2.00.

Here, FXStreet's analysts evaluate where ADA could be heading next as it seems bound for higher highs.

 

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Cryptos feed

Latest Crypto News


Latest Crypto News & Analysis

Editors’ Picks

Top 3 Price Prediction Bitcoin, Ethereum, Ripple: BTC scales higher, taking altcoins with it

Bitcoin price exuded bullishness over the past week as it continued to rally without significant corrections. As a result, Ethereum, Ripple and other altcoins have followed suit. Although the entire market looks bullish at the time of writing, things could turn awry if BTC witnessed a September 7-style crash.

More Bitcoin News

Dogecoin killer Shiba Inu ready for new bull run

Shiba Inu gets listed on Binance.US, SHIB price recovers from the loss posted over the past week. The Shiba-Inu-themed token is one of the top 10 most mentioned cryptos on Twitter alongside BTC, ETH, DOGE, ADA. Shiba Inu CEO reveals that Shibarium, Shiba L2 using Bone as native token, is currently under development.

More Dogecoin News

AVAX price to hit new all-time high at $80 as Avalanche bulls take over

AVAX price rose exponentially after breaking out of a crucial resistance level on September 10. However, this uptrend was cut short as the markets collapsed on September 12, which led to a quick retracement. However, Avalanche seems to be back on track and ready to continue its rally.

More Cryptocurrencies News

XRP price awaits 26% upswing, but stiff hurdles may blindside Ripple bulls

XRP price appears to be headed for a 26% climb, but the hopes of a Ripple rally could be hampered by the multiple resistances that stand in the way of the bullish target. The cross-border remittance token could find substantial support, should the optimistic outlook be ruined. 

More Ripple news

BEST CRYPTO BROKERS/EXCHANGES



Bitcoin Weekly Forecast: Markets revert to mean, but BTC price remains indecisive

Bitcoin price shows considerable strength after springing from the recent crashes. Still, it is uncertain whether the current bullish impulse will morph into a new uptrend or lead to a more profound decline.

Read the weekly forecast

BTC

ETH

XRP