Cardano (ADA), the white paper crypto project from Ethereum Co-Founder Charles Hoskinson, has ended the previous trading month on a slight high after weeks of downward pressure. Could this be a future sign of bullish potential to come within Cardano?
The market had created a new 2-month high in early May, reaching a price of $0.3880, before experiencing a month of turmoil as prices dropped to a low of $0.1833. Since then prices have rebounded and are currently exchanging hands at a price of $0.2236, at the time of writing.
Cardano has experienced an 11.50% increase in price over the past 7-days, according to data from www.coincheckup.com, as it sits comfortably at rank 7 in terms of overall market cap with a total value of $5.84 billion. The fact that the cryptocurrency is able to hold its value at such a relatively young age speaks wonders to the potentials of this project.
The team has recently launched their testnet which allowed developers access to experiment with smart-contracts on the Cardano protocol, which is proving to be a solid proof of concept for all Cardano holders. The confirmation that Cardano could be serious competition for Ethereum, will come over the weeks ahead as developers get to taste the benefits of the platform.
ADA/USDt Price Analysis
Long Term – Daily Chart
From a long term perspective, it is difficult to provide solid technical analysis as the market has only been trading for a short period of time.
From the chart above, we can see that the ADA token has been falling in terms of value against the USD in this current year. ADA fell from a high of $1.3839, set in early January, to a low of $0.1232, set in March.
The month of March provided some positive momentum for the bulls within the market as they pushed price from its previous low mentioned, to a high of $0.3884, over a 170% price increase. However, this bullish momentum was not able to hold during the next month, May, as prices declined further to the most recent low experienced toward the end of May at a price of $0.1710.
For prices to be considered to be trading within a bullish condition, from a long term perspective, we would need to see price to break and hold above the highs set in May at a price of $0.3880.
Short Term – Daily Chart
Taking a closer look into price action over a more recent period, we can see that during May, ADA has retraced up to the .886 Fibonacci Retracement level taken from the bullish run seen throughout April. Price action managed to find support at this level and has since reversed and is attempting to retest the .618 Fibonacci Retracement located at $0.2354.
If price action manages to break and hold above $0.2354 then we could expect the market to head higher and retest previous resistance at price $0.38, set out toward the end of April. If price can continue beyond this high, then our initial target comes in at $0.4590, a 1.272 Fibonacci Extension taken from the bullish run seen in April.
Alternatively, price action could meet resistance at $0.2354 as the bears step in and push price lower. In this scenario, we would expect prices to be pushed toward the psychological round number level of $0.2000.
The technical indicators are beginning to show some positive signs for the bulls. The RSI indicator is currently battling its way up above the 50 handle. If RSI continues to hold above 50, we would see the market trading within a bullish environment. Similarly, the 7-day EMA and the 21-day EMA have stopped pulling away from one another as they begin to constrict. If the 7-day EMA and the 21-day EMA can cross over each other then this would send positive signals toward the bulls within the market.
Short Term – 4-Hr Chart
Looking at a 4-Hr chart, we can see that ADA has made some significant gains against the USD over the past few trading sessions.
Price is currently testing near term resistance marked at $0.2280. If price action could break and close above this level and the .618 Fibonacci Retracement, then we could expect price to head toward the $0.2458 – $0.2637 region over the next few trading days.
The technical indicators, on a short term basis, are showing signs of increased bullish momentum. The RSI is constantly above 50, showing bullish momentum, and the short term EMAs have crossed over each other.
A Quick Look Into ADA/BTC
Long Term – Daily Chart
As we can see from the chart above, ADA is currently reclaiming some of the losses seen during the month of May. Price action started the month at a high of 4184 SATS but continued to fall until the month’s low at a price of 2412 SATS.
The past few trading days have been very promising for ADA against BTC. We can see that a bullish engulfing pattern was formed toward the end of May which helped signal a reversal of the previous bearish pressure experienced within the market.
Price action is currently resting above former support, If prices can continue to break above 3000 SATS then we could expect a promising month for ADA against the USD and BTC.
The market is within an exciting time for ADA. Cardano has suffered a rough time, in terms of price, from its inception earlier this year. However, there are recent signs that the market could be within a potential reversal.
It will be important to closely follow any news on development released by the team over the following weeks and see how price reacts. If ADA can continue to prove in its use-case over Ethereum then we may be at the start of a good few months for Cardano.
– Yasin Sheikh