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Cardano: a tale of two breakups, but which is more likely




Disclaimer: The findings in the following analysis are the sole opinions of the author and should not be taken as investment advice.

As the dust settled on the Cardano market, the price began to take shape within a symmetrical triangle. The end of the consolidation phase would lead to a sharp turnaround, but the direction is still unclear.

The following article explains two possible outbreaks that could be possible and certain conditions that must be met for each outcome. At the time of writing, the ADA was valued at $ 2.46 with a market capitalization of $ 78.8 billion.

Cardano’s 4-hour chart

Source: ADA / USD, TradingView

After recovering from $ 2.25, ADA formed a symmetrical triangle on its 4-hour chart. Now there are two possibilities in the future. If the pattern works as a continuation of the previous downtrend, a breakdown is likely. A bearish result would put ADA back near the $ 2 mark – another 17% drop from its level at press time.

To confirm this result, sellers would have to impose a close below the 200-SMA (green) and the September 8 low of $ 2.25.




On the other hand, there are chances that the symmetric triangle works as a reversal pattern. In this result, a break to the upside would position ADA between $ 2.95 and $ 2.96. A close above $ 2.62 and the 50-SMA (yellow) would increase the probability of this rally.

However, it is important to note that there will likely be a period of consolidation before a breakout is observed. Volatility has also been gradually decreasing as key indicators gradually moved towards equilibrium levels.

Reasoning

The 4-hour RSI was denied a breakout above its midline and moved slowly as the bears prevented a further rally. The same was confirmed by the trajectory of the Directional Movement Index. The -DI moved in parallel with the + DI line and suggested that a downtrend is still active.

On a positive note, capital inflows were healthy as Chaikin’s money flow gradually shifted to higher levels. These entries could act fail-safe against a prolonged market downturn.

conclusion

The latest cryptocurrency sell-off caused a state of turmoil in the ADA market. While a symmetrical triangle pattern emerged on the charts, the direction of the breakout is unclear.

The indicators, at press time, were more inclined towards a bearish result. However, there seemed to be valid arguments on both sides. So a safer bet would be to wait for the ADA to touch the aforementioned levels before making a long or short call.

This is a machine translation of our English version.




TAMMY SEWELL
Tammy Sewell is our Writer and Social at OICanadian.com. Tammy loves sports, she writes our celebrities news. She spends time browsing through several celebs news sources as well the Instagram. Email: [email protected] Phone: +1 513-209-1700

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