Disclaimer: The findings of the following analysis are the authors’ sole opinions and should not be considered investment advice.

Cardano flipped the $0.438 support into immediate resistance on the 4H chart. Binance funding rate for ADA turned positive

After plateauing at the $0.51 resistance in September, Cardano [ADA] undertook a journey south during the last three weeks. As a result, this decline brought in a trendline resistance (white, striped) that caused continued sales rallies.

With price action struggling to break the shackles of its 50 EMA (cyan) resistance, the near term trend has been seemingly bearish.

A reversal of the newly found resistance could pose downside risk in the coming sessions. At the time of writing, ADA was trading at $0.433.

The 4H Chart Revealed the Bearish Edge as Sellers Find Renewed Pressure

Source: TradingView, ADA/USDT

While the 20 EMA (red) and 50 EMA (cyan) have continued to look south for the past few weeks, the short-term story took on a bearish tendency.

The descending triangle arrangement emphasized the accelerated selling advantage as the sellers continued to lower the spikes while the buyers sought to protect the $0.438. The resulting disturbance caused the bears to flip this mark from support to immediate resistance.

Next, ADA marked a compression in the $0.438-0.4301 range for more than three days. This stretch included a rectangle-bottom-like structure. The coin could see a phase of low volatility in the next few sessions before a plausible breakout occurs.

This structure usually leads to a downtrend after the pattern break. Thus, a close below the $0.43 support could trigger a sell signal.

In this case, the buyers would try to re-enter the market in the $0.416 zone. Any growth above the 50 EMA and 3-week trendline resistance would indicate a bearish invalidation.

The Chaikin Money Flow (CMF) saw a break above zero and hinted at a bullish edge. But the higher highs indicate a bearish divergence with the price action.

Financing rates are witnessing an increase

Source: Santiment

Funding rates have been positive on Binance for the past two days, according to data from Santiment. This reading implied that long positions paid the funding fee for short positions [Interval: 8H].

Simply put, the statistic implied that most traders were somewhat bullish on the futures market. Rather, the price action has yet to reflect this sentiment.

All in all, ADA was at a critical point. But the sales triggers and goals would remain the same as discussed above. The traders need to consider Bitcoin’s movement and its effects on the wider market in order to make a profitable move.

This post cardano [ADA] buyers should consider this before opening a long position

was published first on https://ambcrypto.com/cardano-buyers-must-consider-this-before-opening-a-long-position/


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