Disclaimer: The findings of the following analysis are the only opinions of the writer and should not be considered investment advice.

Cardano has been in a steady downward trend since April. Going further back, Cardano peaked in September 2021, when the coin hit its all-time high (ATH) of $3.1.

In the past few months, there has been evidence of increasing buying volume. This could indicate the formation of a bottom for an asset on the price charts. Should Cardano bulls be excited about this finding in the long run?

ADA- 1-Day Chart

Source: ADA/USDT on TradingView

In May and June, ADA formed a range of $0.44 to $0.64, shown in white. In early June, Cardano was rejected at the range highs. In mid-July, the range dropped below the low to test the horizontal support at $0.4 and a quick jump to $0.55.

For the past two months, however, the midpoint of the range had acted as a solid resistance. He did that again in the past two weeks. Despite the best efforts of the bulls, they were unable to close a daily trading session above USD 0.52, highlighting the number of sell orders near USD 0.55.

At the time of writing, ADA appeared poised to move towards $0.44 and likely lower as well. The technical indicators have shown bearish momentum, but also the presence of some buying volume in recent months. But based on the price action, a turnaround was not yet likely.

rode

Source: ADA/USDT on TradingView

The daily chart’s RSI climbed above the neutral 50 for two weeks and rose as high as 60. The bulls tried their best to reverse the trend, but the $0.55 bearish bastion was simply too strong. The Stochastic RSI also recently formed a bearish crossover and plunged lower.

The OBV faced resistance at an orange marked level, a level that served as support in April. The OBV has had to deal with rejection of this level in recent weeks.

Still, the OBV has been hitting higher lows since May. This suggested buying volume is on the rise and hinted at the possibility of an accumulation phase for Cardano within range.

Conclusion

The rising OBV alone does not deserve the expectation of a trend reversal. The presence of heavy buys in the past two months need not lead to a massive rally to $0.55 or even above.

Bitcoin was also under selling pressure on the charts, and any losses BTC sees could see Cardano dump lower as well. Caution has been advised and long-term investors can wait to buy strength rather than weakness.



This post Cardano long-term investors can wait to buy power here

was published first on https://ambcrypto.com/cardano-ada-long-term-investors-can-wait-to-buy-strength-here/

Author

Write A Comment