• 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

Cardano price positioned for bullish reversal, with 100% gains in sight

Cardano price action has been some of the most dismal and disappointing out of all the major cryptocurrencies. But Cardano’s fortunes are about to change.

More Cardano News

Binance Smart Chain implements ongoing burn like Ethereum’s EIP-1559

Binance successfully concluded the Bruno upgrade v1.1.5 earlier today. A burn mechanism is now implemented to reduce the circulating supply of Binance Coin. 

More Binance Coin News

XRP nodes run by Ripple fell out of sync for over 5 hours, disrupted wallet services

Public XRP ledger nodes “s1” and “s2” run by Ripple fell out of sync with the XRP ledger for over 5 hours yesterday. Non-custodial XRP wallet Xumm was not functioning well, disrupting usage and accessibility. 

More Ripple News

Chainlink price ready to reverse, 30% upswing likely for LINK

Chainlink price seems ready for a reversal of its two-week downswing as it attempts to create a higher high. This outlook is also supported by on-chain metrics, which suggest the possibility of accumulation at the current levels for LINK.

More Chainlink News

Cyber Monday 2021 Discounts!

Glued to your trading screen on Cyber Monday? Upgrade your skills by signing up for FXStreet’s Premium service, offered at a discount of up to 50%. Fellow traders have already taken advantage of Black Friday profits. What about you? 

Subscribe now!