Cardano (ADA) Shoots for Highest Weekly Close Since 2018

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In Brief
  • Cardano is in the process of moving above the long-term $0.166 resistance area.

  • ADA is following a short-term ascending support line.

  • It's likely in an extended long-term third wave.

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The Cardano (ADA) price is in the process of reaching a weekly close above a long-term resistance level at $0.166, something it has not done since May 2018.

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A weekly close above this level would be an extremely bullish development, indicating that Cardano is likely to move higher towards the $0.21-$0.26 range.

 

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Cardano Long-Term Resistance

ADA has been increasing since March when it reached a low of $0.017. The rally stalled once it reached the $0.166 resistance area in July. The area is also the 0.382 Fib retracement level of the most recent downward move.

After an initial rejection, ADA found support and initiated another attempt at breaking out above this level. While it has reached a high above it, it has failed to reach a weekly close higher than this resistance area since May 2018.

If successful in doing so, the next resistance areas would be found at $0.21 and $0.26, the respective 0.5 and 0.618 Fib retracement levels.

Technical indicators are leaning on being bullish. Despite a bearish divergence in the RSI, a drop has already occurred as a result, and the RSI is again moving above 70. A bullish cross in the Stochastic oscillator (highlighted in green) and a weekly close above $0.166 would likely confirm that the trend is bullish.

*Note: The logarithmic chart is used in the image below in order to better visualize large price fluctuations.

ADA Chart By TradingView

Future Movement

The daily chart shows that ADA has finally been successful in moving above the $0.172 resistance area, something it had been struggling to do since Nov. 22.

The movement since the breakout resembles a re-test and validation of the area as support.

Technical indicators are bullish, suggesting that ADA is likely to continue moving higher.

ADA Chart By TradingView

The two-hour chart also shows that ADA is following an ascending support line and is expected to continue increasing as long as it is above this line.

Similar to the daily and weekly time-frames, technical indicators are bullish, supporting the possibility that ADA continues moving higher.

ADA Chart By TradingView

ADA Wave Count

Cryptocurrency trader @theEWguy outlined an ADA chart, which shows the price increasing at an accelerated rate towards $0.40 and potentially even $0.60.

Source: Twitter

The wave count shows that ADA is likely in what appears to be in an extended third cycle wave (shown in white below), while the wave count is given in black.

A likely target for the top of wave 3 is found at $0.29, which would give the 1:3 waves a 1:1.61 ratio — common in bullish impulses.

The most likely scenario is that ADA is in wave 1 of an extended cycle wave 3.

ADA Chart By TradingView

The sub-wave count for wave 1 is given in orange below and shows that ADA is in sub-wave 5.

A target for the top of the move is found at $0.22, after which a correction is expected.

ADA Chart By TradingView

Conclusion

While a short-term decrease could occur, Cardano is expected to gradually move upwards towards the $0.21-$0.26 range. 

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

Disclaimer: Cryptocurrency trading carries a high level of risk and may not be suitable for all investors. The views expressed in this article do not reflect those of BeInCrypto.

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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 discovered cryptocurrencies while he was getting his MSc in Financial Markets from the Barcelona graduate school of Economics. Shortly after graduating, he began writing for several different cryptocurrency related websites as a freelancer before eventually taking on the role of BeInCrypto's Senior Analyst.

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