Cardano (ADA) has recently shown signs of a short-term downtrend, reacting off the daily pullback resistance at $0.455. For investors watching from the sidelines, this could present a prime opportunity to accumulate ADA tokens, with potential for a significant rally in the near future.
As of Thursday, Cardano’s price has encountered resistance at the $0.455 level, which has initiated a short-term downturn. The token’s value retraced by 3%, trading around $0.393. This movement follows a 7% rally post a breakout above a descending trendline on July 12, which was subsequently rejected at the $0.445 resistance level, leading to an 8.6% decline.
Investors looking for a buying opportunity might find it in the daily bullish order block area between $0.363 and $0.349. This region is significant as it aligns with the trendline breakout point at $0.357, marking it as a potential reversal zone. Historical data indicates that institutional traders have previously placed buy orders in this area, making it a critical support level.
Should Cardano’s price bounce off the $0.357 level, it could potentially rally by 24% to retest the daily resistance at $0.445. This level is crucial for ADA, as breaking above it could lead to further gains.
The Relative Strength Index (RSI) on the daily chart has briefly dipped below its neutral level of 50, while the Awesome Oscillator (AO) is trending towards the same. For a bullish rally to take hold, these momentum indicators need to maintain positions above their respective mean levels, signaling a strong comeback by the bulls.
In an aggressive bullish scenario, if ADA manages to close above the $0.445 resistance level, it could extend its rally by an additional 26%, targeting the 50% retracement level at $0.564. This level is derived from the March 14 high of $0.810 to the July 5 low of $0.318, making it a significant target for bullish investors.
According to data from IntoTheBlock’s In/Out of the Money Around Price (IOMAP) model, approximately 161,130 addresses have accumulated 1.91 billion ADA tokens at an average price of $0.385. This accumulation zone, between $0.379 and $0.391, serves as a key support level, coinciding with the technical analysis findings and reinforcing the likelihood of a price reversal in this area.
Even with these positive indicators, it’s important to note that a daily candlestick close below $0.317 would invalidate the bullish thesis. Such a development could push ADA’s price down by 10%, potentially retesting its daily low of $0.283 from November 1, 2023.
The current price movements of Cardano present a compelling case for potential investors. With key support levels identified between $0.363 and $0.349, and significant bullish indicators on the horizon, this period could be an opportune moment to accumulate ADA tokens.
However, investors should remain cautious and keep an eye on the critical $0.317 level. A close below this threshold could signal further declines, negating the bullish outlook. For those looking to capitalize on this potential upswing, maintaining awareness of market conditions and technical indicators will be crucial.
In summary, while the cryptocurrency market remains unpredictable, Cardano’s current price dynamics offer a promising opportunity for those willing to navigate the risks and rewards of the digital asset landscape.
Steven is an explorer by heart – both in the physical and the digital realm. A traveler, Steven continues to visit new places throughout the year in the physical world, while in the digital realm has been instrumental in a number of Kickstarter projects. Technology attracts Steven and through his business acumen has gained financial profits as well as fame in his business niche. Send a tip to: 0x200294f120Cd883DE8f565a5D0C9a1EE4FB1b4E9
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