Since Cardano (ADA) hit his ATH on September 2, he started the downtrend and practically dropped below its 20-50 EMA. The drop proved quite threatening to the bulls as they were unable to defend the $1 mark.
A close above $0.9 would position ADA for a possible retest of its Point of Control (POC). Post that, it could face a pullback from near the $1.1 zone and move back into its long-term trend. The seventh largest cryptocurrency has most likely positioned itself to regain the vital $1 support (now resistance). At the time of writing, it was trading at $0.888, down 1.2% in the past 24 hours.
ADA daily chart
Source: TradingView, ADA/USDT
Since its ATH, ADA has formed a six-month bearish channel (reversal pattern, yellow), while the alt has been in a steep downtrend. In addition, as of February 10, it lost more than 40% of its value after forming a bearish flag and pole on the daily chart.
As a result, it plunged to its 9-month low on Feb. 24 as buyers stepped in to defend the $0.82 level. It becomes vital to note that this level of support has stood as a test floor for nearly a year. As a result, the bulls have exerted pressure over the past two days and rejected lower prices.
As of now, assuming the bulls are keen to keep the $0.82 mark intact, the alt was looking at a 20 EMA retest followed by regaining the $1 support. Historically, ADA has picked itself up from the lower trendline of the downtrend and tested its 50 EMA before adjusting to the downtrend. However, the next few candlesticks would confirm whether history would repeat itself or not.
rode
Source: TradingView, ADA/USDT
The bearish RSI showed an expected rebound from its oversold mark. Any close above the 38 mark would likely trigger a retest at the 44 point hurdle. A recovery to the midline seemed conceivable in the coming days as the bulls tried to topple these barriers.
The DMI reaffirmed the heightened bearish influence. With the -DI approaching its long-term peak, there is a good chance of a recovery in the coming days.
Conclusion
While a trend reversal could still require exceptional efforts on the part of bulls, in the medium term it seemed likely to test the checkpoint and find a close above the 20 EMA. Still, traders/investors should keep a close eye on Bitcoin’s movement, as ADA shares a 71% 30-day correlation with the king’s coin.
This post Cardano holders to witness a recovery towards $1? Chances are high…
was published first on https://ambcrypto.com/cardano-holders-to-witness-a-recovery-toward-1-the-chances-are/
