Disclaimer: The information presented does not constitute financial, investment, trading or other advice and is solely the opinion of the author.
The higher time frame market structure remained strongly bullish. The $0.4-$0.42 is a key area of resistance, but ADA is likely to move higher.
Cardano [ADA] bounced from $0.38 to hit the $0.4 resistance level in the past three days. The technical structure remained bullish on the one day time frame – a move above $0.4 and subsequent retest could represent a buying opportunity.
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The increase in whale transactions increased significantly after February 3. This raised concerns that buyer dominance was weakening.
All pumps in the $0.42 area are for profit
Cardano has seen a remarkable streak so far. A jump above $0.31 and the subsequent retest of $0.32 finally broke support on the daily market structure. The bias remained bullish, although the RSI fell further to show weakened bullish momentum.
This was because ADA encountered strong resistance around $0.4. It is an important horizontal level with a higher time frame. The $0.425 level acted as support from May to October 2022. Below that, the $0.4 and $0.376 levels also acted as key support and resistance levels in October and November.
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Therefore, late to the party, ADA bulls have to recognize that the meat of the upside is done. Shorter time period scalps within the region of $0.4-$0.42 are possible. Longer-term buyers can wait for the $0.42 reversal to be supported before bidding and should be ready to cut the trade at a drop below $0.4.
Rising OBV put some demand behind ADA. Above $0.42, $0.51 and $0.6 are the next high timeframe levels to watch out for.
Sentiment was lukewarm in February
Weighted sentiment fell below the zero mark as February 2023 began and has not recovered since. The MVRV ratio (30 days) also fell, but the price did not see a significant sell-off. This hinted that holders could be ready to post profits in the short term, and that selling pressure could soon ease.
Development activity was unaffected by the higher price swing, which should encourage long-term holders. The age-consumed metric saw a rapid spike in early February as ADA pulled back from $0.413.
This post Cardano Approaching Critical Resistance Level at $0.42: Bulls to See More Gains?
was published first on https://ambcrypto.com/cardano-approaches-critical-resistance-level-of-0-42-bulls-to-witness-more-gains/