Nothing in this article is to be construed as investment advice. Neither the author nor the publication assumes any responsibility or liability for any investments, profits, or losses incurred as a result of this information.
Cardano has had a tough week so far, down 20% against Bitcoin (BTC) in the last seven days and ousted by Monero from the number nine spot. While many top 10 cryptocurrencies were showing stronger signs of recovery yesterday, Cardano was slow to regain ground, with many investors trading out into Tether (USDT) to prevent further losses.
The project recently announced a number of development updates in its roadmap, including a web-light wallet (Yoroi), but these releases failed to inspire much-needed bullish support.
As the market begins to recover, however, ADA is showing some signs that bulls may be starting to return to the asset.
Diving into the 4hr ADA/BTC chart, we can see the asset has been tracking consistently inside a falling wedge pattern since May this year. Market demand for ADA has been decreasing over the third quarter, with the price dropping by 50% since July.
These patterns are typically bullish reversal patterns, characterized by an asset consolidating inside a falling triangle until it reaches a bottom where bulls can push back at the bears. When the asset breaks free of the down-trending resistance, it can sometimes ‘throwback’ onto the level and use it as a support to continue upward. The analysis video shows how inverse bullish H&S patterns can also emerge from this price activity and encourage a continuation.
Looking at ADA right now, we can see how an inverse H&S could form from the recent recovering price action; however, we would need to see it break out from the pattern and retrace back to the resistance before we can confirm this.
In the last 24 hours, ADA has found temporary support at 970 Sats, and bulls are now starting to fight back against the mounting selling pressure. Despite this level not being a clear support line for the asset, there are some promising bullish signals that show good strength in this movement.
On the CMF indicator, we can see a clear spike in buying pressure over the signal line, which is a positive sign of a strengthening trend.
Momentum on the RSI has increased dramatically into the middle of the index channel after falling into the oversold region below three times before.
On the ichimoku indicator, we can see the asset is closing in on the resisting kumo out in front with a positive T/K crossing. If candles can pass through this cloud and continue to climb, this will be a strong bullish continuation signal.
Cardano (ADA) price targets
All price targets are set from the 1,075 Sats mark, where the asset is currently valued.
Price Target 1: Continuation to first minor resistance at 1,168 Sats mark (8.66% ROI)
Price Target 2: Correction back to minor support at 1,110 Sats (3.39% ROI)
Price Target 3: Springboard to test the down-trending pattern resistance at 1,203 Sats (11.91% ROI overall)