Disclaimer: The findings of the following analysis are the sole opinions of the author and should not be taken as investment advice.
The past few days have seen ADA battle some bearish divergences and an overbought RSI to resume its run north. Its price, at press time, was 21% higher than its May all-time high. Furthermore, the indicators suggested that there is more room for growth before the next correction.
At the time of this writing, ADA was trading at $ 2.85 with a market capitalization of $ 84.24 billion.
Cardano’s 4-hour chart
The ADA progression on the 4-hour chart was slightly clearer compared to the daily chart, which showed an increase of almost 90 degrees. In the lowest time frame, ADA has risen steadily since early August while holding its highest highs and lows. The resting grounds were formed at $ 1.88, $ 2.38 and $ 2.80, levels that have allowed the ADA to stabilize before shooting north.
Following this trend, the current ADA consolidation around $ 2.8 has paved the way for another price change and the $ 3 mark seemed like a guarantee. Some targets are in the 161.8% and 200% ranges. The bigger question, however, was this: does ADA have the legs to continue its ascent above $ 3?
Short answer: it is very likely.
Even though the Relative Strength Index was close to overbought levels, an ascending triangle formation presented possibilities for a further rise above $ 3. Additionally, the Awesome Oscillator formed a higher peak and suggested that buyers they were actually growing in number at various prices. Such a development was also seen on the MACD, but a bearish crossover presented some short-term risks.
To initiate the downsides, sellers should target a close below $ 2.70 and the 20-SMA (red). On the contrary, a low formed anywhere below $ 2.37 would be even more threatening. Naturally, this would also cause failure of the aforementioned indicators.
As ADA looks at the $ 3 mark, the focus is on the 161.8% and 200% Fibonacci Extension levels going forward. If sellers trigger pullbacks, the price will need to hold a position above $ 2.37 to preserve ADA’s bullish thesis.
This is a machine translation of our English version.
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