Cardano had an interesting last week whereby it rose into the fifth spot on the market despite the freefall in price. The staking platform boasts of a market cap of $48 billion and trails immediately behind Binance Coin.
The trading last week was gruesome not only for ADA but the entire crypto market. From the recently traded all-time high of $2.5, ADA plummeted to the support at $1.1.
However, the downswing appears to have allowed more investors to enter the market at a lower price, explaining the reflex recovery to $1.6. Moreover, a highly bullish pattern is formed on the chart and is likely to bolster Cardano significantly.
The recovery included the breakout from the falling wedge pattern stalled within a whisker of brushing shoulders with $1.6. Perhaps the overhead pressure came from the resistance at the 200 Simple Moving Average.
It is apparent that bulls are fighting to hold at higher support, a move that ensures that buyers the uptrend is not sabotaged. The falling wedge is a highly bullish pattern, with a target at $2.2.
Meanwhile, Cardano must bring down the resistance at the 200 SMA on the four-hour chart and close the day above $1.6 to validate the anticipated liftoff. The Moving Average Convergence Divergence (MACD) has a bullish outlook, cementing the prevailing technical picture.
ADA/USD four-hour chart
ADA/USD price chart by Tradingview
Looking at the other side of the picture
The Relative Strength Index (RSI) emphasizes the growing overhead pressure following the rejection at $1.6 and the 200 SMA. Its retreat below the midline is a vivid bearish picture that cannot be ignored. Therefore, investors should be prepared for the bearish leg to extend to $1.4 and $1.1 levels, respectively.
Cardano intraday levels
Spot rate: $1.5
Trend: Short-term bearish bias
Support: $1.4 and $1.1
Resistance: The 200 SMA, $1.6 and $1.8
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John is a talented writer with over two years of experience actively contributing to the cryptocurrency industry by providing credible, interesting and easy to read the content. His main focus is on cryptocurrency price analysis and industry news coverage. Lets follow him on Twitter at @jjisige