By Nathan Ferguson
Cardano’s latest drop from $0.66 saw ADA printing a downward channel on its 24hr chart. The Exponential Moving Average ribbons matched the 38.2% Fib resistance to restrict the asset’s buying efforts within the previous month.
The alternative token might trigger an attractive selling opportunity if bears propel reversals from $0.51. While publishing this content, ADA hovered around $0.4995, gaining approximately 3.25% within the previous day.
Cardano Daily Timeframe
The alt’s immediate outlook resorted to a bearish flip as the price action dropped beneath the Exponential Moving Average ribbons. The downward channel oscillation stopped around the POC (Point of Control), remarking a solid scrimmage between sellers and buyers.
Gains within the past ten days have supported buyers in overpowering the long-term downward channel. Also, Cardano witnessed a climbing wedge-like formation nearing the 38.2% FIB retracement. Meanwhile, price actions have struggled to breach the EMA ribbons’ upper border for more than 100 days. A break beyond this mark would place the token to record gains (in the near term). Such developments would have potential targets around the $0.57 mark. Nevertheless, pullbacks from the closest hurdles might stretch the squeeze period in the upcoming sessions. That trajectory might trigger reversals toward $0.45.
Reasoning
The RSI (Relative Strength Index) adopted a bullish outlook while targeting a break beyond 56. Overcoming this resistance might support the short-term buying momentum. Moreover, the Moving Average Convergence Divergence line witnessed a closing beyond the zero level and confirmed reduced selling strength. Continued moves beyond the equilibrium might cancel ADA’s bearish outlook.
Furthermore, the DMI (Directional Movement Index) re-confirmed the bullish momentum. However, Cardano’s ADX flashed a significantly weak directional bias.
Final Thought
Considering the prevailing setup nearing the 38.2% mark and the Exponential Moving Average ribbons, Cardano might exhibit downside risks. Price targets would stay as highlighted above. Meanwhile, a closing beyond $0.515 would annul these bearish tendencies. Lastly, ADA investors should watch Bitcoin’s actions as they impact broad market movements. That will help identify invalidation levels. Also, it can aid in profitable bets.