• Cardano price action is recovering from the whipsaw price action over the weekend and this week thus far.
  • ADA price is in search of support and could be seen retracting a bit.
  • Once support is met, expect a continuation of the rally towards $0.687.

Cardano (ADA) price action is puzzling as, on the one hand, a continuation of the summer rally is still very much granted, but unfortunately, the recent pullback has not made it all the way back toward that green ascending trend line that has been providing support and and a level for price action to bounce off in the past. Traders are assessing the situation and trying to decide if they should add to their positions now or await a test on the technical trend line with the risk of missing the boat. From the looks of it, with the elevated Relative Strength Index (RSI), it looks best to wait for a pullback to $0.540 to enter and sit on the rally towards $0.687, which is the base of the bullish triangle ADA price is currently trading in.

ADA price set to pop after support flows in

Cardano price action has been having difficulties with the monthly R1 resistance level at $0.580 and is at risk of forming a double top which would see a short-term squeeze to the downside. Although this is perceived to be bearish, it would be good for price action to drop back towards support from the green ascending trend line. That technical element would provide a better entry and see the demand-side blow up on orders, triggering a more concise move in the price action on the rally. 

ADA price will see the RSI with its small step back cool down as well, which will only add to the incentive for bulls to jump into the price action once it trades near the green ascending trend line. From that level the rally will make more sense and is viable to get to the $0.687 baseline which is the High Of Day (HOD) from Feb 06, 2021. Alongside that move, it means a 23% increase in price evaluation, even before the bullish breakout of the triangle.

ADA/USD Daily chart

ADA/USD Daily chart

As mentioned above, letting the double top form is a bit of a gamble by bulls as bears will seize that moment to push price action back down. Should that momentum pick-up speed it will likely be helped by global markets being on the back foot, which could mean a possible break of that green supporting trend line. If that breaks, expect bears to jump in on occasion and see ADA price being swamped with sell orders, triggering a minimal 10% drop before finding initial support at the 55-day Simple Moving Average (SMA) and the monthly pivot around $0.492.

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 Join Telegram

Recommended content


Recommended Content

Editors’ Picks

Bitcoin price: Watchout for 30% decline in Bitcoin price, according to this indicator

Bitcoin price: Watchout for 30% decline in Bitcoin price, according to this indicator

Bitcoin price surpassed the key psychological barrier at $19,000 and sustained above this level. American businessman and author Robert Kiyosaki believes that it is a buying opportunity for BTC.

More Bitcoin News

Dogecoin Price Prediction: DOGE to revisit $0.65 to rebalance inefficiency

Dogecoin Price Prediction: DOGE to revisit $0.65 to rebalance inefficiency

Dogecoin price underwent a tight consolidation between September 28 and 30, which eventually resulted in an explosive move up that collected the buy-stop liquidity resting above the September 27 swing high.

More Dogecoin News

Litecoin price set for a profitable week in a battered quarter

Litecoin price set for a profitable week in a battered quarter

Litecoin (LTC) price is set to jump higher this week as markets see bulls storming out of the gate this Monday morning. After a very volatile two weeks where the world seemed to be on fire again and the apocalypse was near.

More Litecoin News

Terra LUNA Classic price could crash 60% despite burn announcement and Coinbase, Robinhood listing rumors

Terra LUNA Classic price could crash 60% despite burn announcement and Coinbase, Robinhood listing rumors

LUNA Classic (LUNC) is the new shitcoin and has overtaken Shiba Inu's popularity, becoming a retail favorite. After Binance announced the LUNC burn program on September 26, the altcoin surged 66% and is currently hovering above another stable support level. 

More Terra News

Bitcoin: BTC’s Q3 close and what to expect in Q4?

Bitcoin: BTC’s Q3 close and what to expect in Q4?

Bitcoin price has developed a bullish divergence with RSI, hinting at more upside. Despite the optimistic technicals, investors should expect volatile swings before the end of the third quarter of 2022. 

Read full analysis

BTC

ETH

XRP