Disclaimer: The findings of the following analysis are the sole opinions of the author and should not be taken as investment advice.
Cardano regained its position as the third largest cryptocurrency on the back of a bull flag breakout that set new records on the chart. The Fibonacci tool highlighted potential target areas in what would turn out to be an interesting week if the bulls can keep up their pressure.
At the time of writing, ADA was trading at $ 2.48 with a market capitalization of $ 79.38 billion. The latter was $ 2.5 billion higher than Binance Coin’s market cap.
Cardano daily chart
The Fibonacci tool was used on the previous ADA retracement from $ 2.25 to $ 1.87 to plot some scenarios going forward. Failure to close above the 50% extension level in the next 24 hours would result in sideways action between $ 2.34 and $ 2.48 as buyers take a breather before the next bull cycle.
Short sellers would be focused in the event that ADA closes below the 38.2% Fibonacci level. However, the gains made are expected to be moderately above $ 2.16. The benchmark for bullish control was at $ 1.87, a level from which the market would be exposed to a sharper sell-off. If these levels are maintained, the next advances would be at $ 2.63 and the 100% extension at the $ 3.1 mark.
Although ADA has been trading at a higher level, the Relative Strength Index did not validate this price action. The RSI formed lower peaks and highlighted a bit of bearish divergence. The index also needed to stabilize from overbought levels.
Meanwhile, the peaks seen in the MACD histogram were also stable. This meant that the ADA move towards $ 2.48 lacked the conviction to move to higher levels. However, the directional movement index presented an overall bullish picture for ADA as the + DI traded above the -DI. This indicated that the ADA uptrend was not under immediate threat of reversal.
ADA could decline to a lower price level before pushing north of its Fibonacci Extension levels of 50% and 61.8%. Some indicators failed to rise and presented some short-term risks.
A doji candlestick or spinning top would be an accurate indicator of an incoming pullback. In such a case, the price should stay above $ 1.87 to preserve the ADA bullish thesis and an eventual rise towards the 100% Fibonacci extension of $ 3.1.
This is a machine translation of our English version.
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