Technical Analysis: Cardano (ADA) Price Prediction

Technical Analysis: Cardano (ADA) Price Prediction

7 months ago

Cardano (ADA) had an incredible run this year. Will it continue or is it going to experience some cool-off period before the next run? Read more to find out!

Technical Analysis: Cardano (ADA) Price Prediction

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Cardano (ADA) gained a fair amount of attention this year. The price of the token continued to make new highs.
Cardano is a proof-of-stake blockchain platform founded in 2015. One of the first blockchains built using the Haskell language, Cardano’s ecosystem features ERGO, a smart contract platform built for DEFI dApps.

Learn more about Cardano’s smart contract and dApps ecosystem.

In this article, we are going to observe ADA’s price movement in different time frames.

At the time of this writing, ADA is ranked as the 7th largest cryptocurrency, according to CoinMarketCap. The market cap is sitting around $43.4 billion. Let's dive into the charts and check out its price movements!

ADA/USDT on a Monthly Chart

Here is a logarithmic chart to make things easier to view.

When you look at the monthly timeframe, it is clear that the trend is in favor of the bulls.

Now, look at the first black circle. You can see there was a breakout from the $0.08 zone. This is the zone where the price picked up the pace and reached the last all-time-high before the breakdown. Let’s observe the price in the second circle. After hitting the high, the price then went through a retest before continuing to the upside. On the chart, there is a strong candle forming today looking for a support level. With roughly half a month left, there is plenty of time to see another big move play out.

For a bullish scenario, a bounce-off is required at this level, however, if it turns out to be a bear trend, we will continue to sell-off.

Let's take a closer look.

ADA/USDT on a Weekly Chart

Sticking with the logarithmic chart and shifting to the weekly timeframe, you can see the price is sitting above an area of interest. The last time it was at this level, there was a long period of consolidation before the next move. History does not always repeat itself, but it does often rhyme. It took a couple of weeks to see a reaction at this level, expecting the same to play out.
This zone is a battleground between the bulls and bears. The more it gets tested for support, the weaker it becomes. The bulls need to take action or they will lose the support level, you can expect a lot of fake-outs at this point.

If bulls manage to regain control here, ADA will continue towards its previous high. However, if the level is lost, the price will continue to make lower lows and lower highs, much like the trend in mid-June of 2019.

ADA/USDT on a Daily Chart

Again, we are using the logarithmic chart and looking at the daily time frame. This time frame gives us a better look at what happens on a daily level.

We can see the price recently closed with a bearish engulfing candle inside the $1.30 resistance zone. There is no confirmation whether the price will continue to sell off or not. However, the bears are gaining more control.
If the price closes below the area of interest, it will continue making lower lows. A close above the bearish engulfing at $1.30 will bring the bulls back. As mentioned above, expect to see a lot of fake-outs at this level before we see a clear direction. For now, the bears are in control for the short term.

ADA/BTC on a Monthly Chart

Last but not least, we are comparing ADA to BTC using the logarithmic chart. The price action is approaching a critical level. Let’s take a deeper look.

The last time when the price was at this level, we saw a close below 3,100 satoshis as the price continued its downtrend. As we mentioned before, history doesn't always repeat itself but it does often rhyme.

Using the Fibonacci retracement tool, you can see the price approaching the 38.6% retracement level. With no signs of slowing down, the sell-off is expected to continue. A confirmation of support around 1,575 satoshis would mean that ADA has found equilibrium and it could signify the start of a new bull trend.
One thing we are sure of is that BTC is outperforming ADA at this moment. Something to keep in mind is how much the price has increased in value this year. It’s been an incredible year of growth for the crypto market.

Summarizing Everything

  • ADA on the monthly time frame shows that the trend remains in favor of the bulls. Its price is sitting at a critical level.
  • ADA on the weekly time frame shows that the price is sitting in a battleground.
  • In a 1D chart of ADA/USDT, bears are in short-term control.
  • In ADA/BTC’s monthly chart, BTC will continue to outperform ADA.

Remember that this is all based on the subjective views of the writer. As always, do your own research.

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