Disclaimer: The findings of the following analysis are the authors’ sole opinions and should not be considered investment advice.
cardanos [ADA] recovery in the past nine days tested the 23.6% and 38.2% Fibonacci resistance levels. However, recent liquidations have pushed the ADA below the 20 EMA (red) and the 50 EMA (cyan) in the past day.
Buyers are now aiming to defend the $0.48 support by rejecting lower prices. An ongoing rebound could find barriers at the 23.6% Fibonacci level in the $0.49 zone. At the time of writing, ADA was trading at $0.4881, down 2.48% in the past 24 hours.
ADA 4 Hour Chart
The altcoin’s previous rally was above the 20/50 EMA. ADA registered an ROI of almost 25% (from June 19 low to June 26 high).
With the USD 0.52 levels limiting bullish rallies for more than two weeks, the expected reversal from the 38.2% level caused a decline of nearly 10% in the past two days.
After an evening star candlestick setup, the sellers caused a downturn. As a result, ADA saw a collapse of its rising wedge-like structure in the four-hour timeframe in the past day.
Now the rejection of lower prices at the immediate support has set off a bullish hammer. But with the broader trend still under bearish command, ADA could hit a barrier in the $0.49 zone.
A strong sell move from this range could prompt ADA to retest the $0.47-$0.48 range. tThe short term EMAs and the $0.5-$0.52 range could curb buying pressure if a bearish invalidation occurs.
The Relative Strength Index (RSI) took a fairly neutral stance as it strived to test its balance. Any midline reversal could reconfirm the bearish edge in current market dynamics.
Recent higher dips on the CMF have confirmed a bullish divergence. But the oscillator will have to cross the zero line to open doorways for a robust recovery.
Also, with the MACD line (blue) diving below zero, sellers showed their increasing strength.
Trading with the current trend can be profitable, especially after the break below the current pattern. Any bearish crossover on the EMA could slow the near-term recovery outlook. The alt could likely enter a squeeze phase near the $0.5 zone.
A reversal from the 23.6% level could lead to a drawdown towards $0.47-$0.48. However, traders/investors must keep a close eye on Bitcoin’s movement and its effects in the broader market in order to make a profitable move.
This post Cardano’s reversal from the 23.6% level could lead to a drop to this range
was published first on https://ambcrypto.com/cardanos-reversal-from-23-6-level-can-inflict-drawdown-toward-this-range/