Cardano Flash Downturn Hits Major Support, ADA Reverses Toward $ 3.00
The price of the cryptocurrency Cardano (ADA) has not been immune to the sudden massive overnight drop that has affected the cryptocurrency market in general. Overall, Cardano price action remains a disappointment for long-term holders, but an exception could be made for last week’s trading activity. Amid intense selling pressure on Friday that saw many altcoins posting near double-digit percentage losses and large weekly losses, Cardano maintained a positive weekly close.
Cardano forms a foundation to serve as a launch pad at $ 3.00 USD and above
Cryptocurrency price action Cardano (ADA) last week spent most of its time establishing and struggling to gain support at the $ 1.45 to $ 1.50 price levels. Some of the most important support areas for Cardano exist near the $ 1.50 level: the 2021 volume checkpoint and the top of the cloud (Senkou Span A). Cardano’s ability to maintain this level amid much stronger weakness in the altcoin market gives traders an idea of where Cardano is likely to go.
And then the sudden crash happened during the midnight trading session in New York. At one point, Cardano collapsed by more than 25%, falling below the weekly price of Senkou Span B. The price of the cryptocurrency Cardano (ADA) has since rebounded and now remains above Senkou. Span B.
A deciding factor supporting the idea that Cardano will make another bull run is the status of the Composite Index. The arrows in the chart below point to the week of the November 5 low of the composite index (the second-lowest value in Cardano’s history) and its corresponding candle directly above and last week’s composite index line towards its corresponding candle.
The candle shows lower closes and lower lows, while the composite index shows higher lows. When this gap appears, we speak of a regular bullish divergence. A consistent bullish divergence is a warning to market participants that the current recession may be reversed soon, the demand for selling pressure has subsided, and buyers are likely to intervene. This divergence arose when Cardano found support against two key levels adding to the bullish outlook.
Cardano Ichimoku Weekly Chart (ADA / USDT)
Downside risks are likely limited to the $ 1.25 level, where there is weekly Senkou Span B and a trailing part of a high volume node. Yet below is a vast sea of nothing – lightning strike territory exists at any weekly or daily close below the $ 1.25 USD value zone.
Pair Jonathan Morgan, FXStreet
Jonathan has worked as an independent futures, forex and cryptocurrency trader and analyst for 8 years. He has also been writing for 5 years. He is one of Quora.com’s “most viewed writers” in the trading and technical analysis categories.
The opinions expressed here are solely those of the author and do not necessarily reflect the views of Forex Quebec. Every investment and business move carries risk, you need to do your own research when making a decision.
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Disclaimer: The information and opinions in this report are provided for general information only and do not constitute an offer or a solicitation to buy or sell currency or CFD contracts. Although the information contained in this document has been taken from sources considered reliable, the author does not guarantee its accuracy or completeness, and does not assume responsibility for any direct, indirect or consequential damages that may result from the fact that someone trusts such information.
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