Highlights of Cardano
- There are resistances at 630, 770 and 1000 satoshi.
- ADA has broken out of the short-term descending channel.
- Prices are trading inside the wedge gradually decreasing.
- Golden cross.
- The RSI supports the short term down.
Trader Lenny outlined the ADA price chart and kept an eye on the descending development channel for the past 5 days.
Keeping a close eye on this descending channel on the lower time frames. pic.twitter.com/64O1EtqEVX
– Lenny (@TraderLenny) February 4, 2020
“Tpig track cHide this descending channel kidney on lower time frames ”.
On January 28, ADA price broke out of the ascending triangle for 172 days. Shortly thereafter, golden cross (bullish cross between the 50 and 200-day moving average) appeared, confirming the price is in an uptrend.
In addition, while the daily RSI is overbought, ADA has not yet shown signs of divergence.
However, the rally has stalled near 630 satoshi, a small resistance level coinciding with the previous high.
The reason for this delay can be seen in the weekly chart. The 630 satoshi area was reached in December 2017 and acted as an unprecedented low until August 2019, when the price finally broke down.
Once the price successfully moves across this area, the strong move towards 1000 satoshi will be no surprise. The next resistance areas are found at 770 and 1000 satoshi respectively.
Since tweeting, ADA has been breaking out of the descending channel. Moreover, it has moved above the 50-day MA.
The price of each breakout from the descending channel was similar to the previous one and the same MA on February 1, leading to a 9% increase. The move upward together with the intensity from here will make price clearer on this resistance area.
Prices are currently trading in the short-term rising wedge, which is considered a bearish reversal pattern. Moreover, the RSI has created bearish divergence for the entire duration of this model. Therefore, breakdown from wedges is expected.
This breakdown will help price confirm the previous breakout level is support. Although this is very normal, the price of ADA has not been achieved yet.
After that, the price is expected to continue moving up to the resistance area of 770 satoshi.
In short, ADA is trading in a short term bearish pattern. Breakdown from this pattern is possible and help resume the current upward move to the above mentioned resistance areas.
Current ADA price | Source: Coinmarketcap
Disclaimer: This is not investment advice. Investors should research carefully before making a decision. We are not responsible for your investment decisions.
Bitcoin Magazine | Beincrypto
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