However, the price has been mired in a correction for a long period of time. Cryptocurrency trader @imBagsy outlined the ADA price and stated that it is in a corrective period. He expects a bounce before the price heads towards the range lows at 400 satoshis.
Moving the chains slowly. 2020 is our year. Smart contracts, scalability, decentralization, high assurance, governance. Time to make a dent in the universe #getitdone https://t.co/3LE08IltTF— Charles Hoskinson (@IOHK_Charles) December 23, 2019
Additionally, he has outlined a possible price scenario in which he will initiate two shorts. Let’s take a closer look at price movement and analyze both scenarios in order to determine their likelihood of occurring.
$ADA update:— Bagsy (@imBagsy) December 24, 2019
Scenario 1 playing out; nice bullish divergence on the 12HR leading into this. Will update if I get the setup I want. pic.twitter.com/zALnzTr8vU
Cardano Ascending TriangleWhile we agree with the range highs and lows at 550 and 400 satoshis respectively, we think the price has been trading inside an ascending triangle since the low on August 9. The ascending triangle is a bullish pattern, making a price breakout more likely. The price is currently trading right at the support line of this triangle. Looking at the weekly time-frame, we have some indications that the price will break out. The triangle is transpiring after a roughly 270 day correction which began in April 2019. Also, the RSI made a double bottom in the oversold region, the lowest value ever recorded. Adding on top of this the bullish cross in the MACD, we believe that the price will break out, and at least revisit the previous all-time low at 650 satoshis.
First ScenarioThe first scenario suggests that the price will move towards the 500 satoshi area. The bullish divergence present in both the RSI & MACD combined with the strong bounce at the support line makes this movement likely. However, since we previously stated that we believe the price will break out, we would only initiate a short at the 500 satoshi level with the intention of re-entering the trade at a lower price. Not doing so would put us at risk of unrealised profits if/when the price breaks out.
Second ScenarioThe second scenario has the price breaking down from the triangle and initiating a short at the retest of the ascending support line. We do not believe the price will break down from the triangle. However, even if it were to do so, we think placing a stop loss below the ascending support line would be more prudent than waiting for a breakdown and retest for two reasons: First, since the Cardano support line is ascending, it is moving away from the stop loss, reducing the risk of it being triggered by a wick low. Second, the retest might not come, and since the target for re-buying at the range lows is a long way from the breakdown level, this could potentially leave the investor with a rapidly depreciating asset. To conclude, the Cardano price is trading inside an ascending triangle, out of which we believe it will eventually break out.
In line with the Trust Project guidelines, this price analysis article is for informational purposes only and should not be considered financial or investment advice. BeInCrypto is committed to accurate, unbiased reporting, but market conditions are subject to change without notice. Always conduct your own research and consult with a professional before making any financial decisions.