Why the current 10% rally for Cardano price could fully reverse
- Cardano price has sneaky bearish volume.
- ADA price slope is steeper than the entire March rally
- Invalidation is a breach and close above $0.88
Cardano price action looks overly ambitious
Cardano price has rallied 10% overnight as the price is currently trading at $0.83. The slope of the inclined price action looks rather steep, which is a questionable indication for future bullish price action. The slope of the incline is twice as steep as the entire rally that took place in mid-March. Traders should consider letting more price action develop before joining the current uptrend.
Cardano price volume indicates a bearish presence despite the current 10% rally. An ideal volume pattern would have been a dip in bearish volume, especially towards the high points of the uptrend. On the contrary, there could be shorts being placed at the current time as the price is starting to lose momentum while the volume remains relatively congruent to low points of the uptrend. The volume signature could indicate smart money involvement at current prices. If this bearish thesis is correct, then the bears could ultimately sweep the lows at $0.737
Invalidation of the bearish model is a bullish close above $0.88. If the bulls can close above this level, they may have the power to send the ADA price back to $1.00, resulting in a 20% increase from the current Cardano price.
Author
Tony M.
FXStreet Contributor
Tony Montpeirous began investing in cryptocurrencies in 2017. His trading style incorporates Elliot Wave, Auction Market Theory, Fibonacci and price action as the cornerstone of his technical analysis.
