Cardano: Here are the chances of a ‘slight’ retracement
Disclaimer: The findings of the following article are the sole opinions of the writer and should not be taken as investment advice
Cardano’s market has fallen into a stalemate over the past few days as buyers and sellers tangled for market control. Over this period, ADA has remained just below its 38.2% Fibonacci Extension of $1.35 and short-bodied candlesticks represented a period of consolidation.
At the time of writing, ADA was being traded at $1.34, up by 0.04% over the last 24 hours.
Cardano Daily Chart
An ascending triangle breakdown saw Cardano take a bearish turn as the price dropped below the 38.2% Fibonacci Extension. Its press time defensive zone of $1.25-$1.22 can be home to ADA’s price movement in the coming days as a stronger trend transpires in the broader market.
The Visible Range indicated that a high level of trades was placed on ADA within the aforementioned range. However, market observers must be cautious of a close below $1.22 as the lack of strong support levels could drag the price back towards its 23 May swing low of $1.05.
Reasoning
The EMA Ribbons’ contracted nature suggested some sideways movement for ADA moving forward. Interestingly, the Directional Movement Index’s -DI maintained itself above the +DI and suggested that a bearish trend was still active. However, the ADX settled at 24 as the trend was easing over the past few days. Meanwhile, some bearish momentum accumulated on the Awesome Oscillator as a hike above half-line was denied.
Although ADA’s press time price seemed to be balanced on either side, bears had the upper hand as per most of its indicators. Once volatility picks up, ADA could find its way back towards $1.22 – A region that could trigger a gradual comeback towards $1.46 over the coming week.
Conclusion
Since a bearish-neutral trend was in play for ADA, there were slight chances of a further retracement to $1.22. A close below this level could lead to an extended decline, but bearish market cues were needed for such an outcome. Meanwhile, traders can opt to go long at $1.22 and exit their positions once ADA touches its 50% Fibonacci extension present at $1.46.
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Saif Naqvi, @KhareemSudlow
