After Rejection, ADA Readies for Breakout Attempt

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In Brief
  • ADA is trading close to long-term resistance at $0.38.

  • Technical indicators are neutral.

  • ADA/BTC has broken out above resistance at 960 satoshis.

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The Cardano (ADA) chart has been decreasing since reaching a high of $0.41 on Jan. 18.



Despite the rejection, ADA has reclaimed the previous breakout level and should resume its upward movement towards $0.45.

Long-Term Levels

The weekly chart shows that ADA is trading right at the long-term $0.38 resistance area, which is the 0.382 Fib retracement level when measured from the all-time high Dec. 2017 price.



Despite being right at resistance, technical indicators are still bullish. If ADA were to break out, the next resistance area would be at $0.61, the 0.618 Fib retracement level of the same move.

Chart By TradingView

Future Movement

The daily chart gives somewhat ambiguous signs.

While there is a hidden bullish divergence in the RSI during the most recent two lows, the MACD is falling, and the Stochastic Oscillator has just made a bearish cross.

Therefore, the daily chart doesn’t provide enough data to confidently predict a breakout above the long-term $0.38 resistance area.

Chart By TradingView

Nevertheless, the shorter-term six-hour chart is slightly more bullish. It seems that ADA has reclaimed the $0.34 area after initially dropping considerably below it (shown with the red circle).

These reclaims are often bullish signs that eventually lead to the continuation of the upward move. Furthermore, the MACD is increasing, supporting the possibility of continuation.

Chart By TradingView

Wave Count

The wave count suggests that ADA is in a long-term wave 3 (white) of a bullish impulse that began with the March lows. If correct, ADA is currently in sub-wave 5 (orange) of this long-term wave 3.

The most likely target for the end of the wave is between $0.455 and $0.488, found by a combination of Fib extensions (white), projections (orange), and external retracements (black)

Chart By TradingView

ADA/BTC

Cryptocurrency trader @DTCCryptoTrading outlined an ADA/BTC chart that shows a breakout and retest above an important resistance area.

Source: Twitter

The previous resistance area is at 960 satoshis, and previously, ADA had been trading below it since Sept. 2020. On Jan. 21, it validated it as support and has been increasing since.

While there is resistance at 1175, the 0.618 Fib retracement level of the entire previous downward move, there is virtually no resistance above it until 1,600 satoshis.

Technical indicators are bullish and support the possibility that ADA will break out towards 1,600 satoshis.

Chart By TradingView

Conclusion

To conclude, ADA should continue rallying towards $0.43, completing the final sub-wave of the current upward movement.

Additionally, ADA/BTC is likely to move above the current resistance area and gradually increase towards 1,600 satoshis.

For BeInCrypto’s latest Bitcoin (BTC) analysis, click here!

Disclaimer

All the information contained on our website is published in good faith and for general information purposes only. Any action the reader takes upon the information found on our website is strictly at their own risk.
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Valdrin is a cryptocurrency enthusiast and financial trader. After obtaining a masters degree in Financial Markets at the Barcelona Graduate School of Economics he began working at the Ministry of Economic Development in his native country of Kosovo. In 2019, he decided to focus full-time on cryptocurrencies and trading.

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