Cardano (ADA) price suggests a possible trend reversal.

Cardano (ADA) price suggests a possible trend reversal.

Cardano (ADA): A Potential Trend Reversal in the Blockchain Industry

Cardano (ADA) has recently shown signs of a potential trend reversal, sparking excitement among enthusiasts and investors. After experiencing a dip to $0.221 in June, ADA embarked on an impressive 48% rally, driven by positive sentiment surrounding the Ripple legal dispute with the SEC. The price surge led to a test of the 61.8% Fibonacci retracement level, indicating a bullish stance for Cardano.

However, the bullish momentum faced crucial hurdles as ADA struggled to stabilize above the 200-day Exponential Moving Average (EMA). As a result, the price corrected back to the breakout level at $0.30, where the bulls regained their footing and pushed the price above the EMA50.

Cardano trend reversal is pending

Bullish ADA Price Targets

For ADA’s short-term outlook to brighten further, it needs to overcome important resistance levels. The first key resistance sits at the 38.2% Fibonacci retracement level, around $0.328. A successful push beyond this level could open the path for an attack towards the $0.355 mark, where the 200-day EMA presents a significant challenge.

However, achieving these targets may require an impulse from the broader crypto market, particularly Bitcoin, or more positive news regarding the Ripple legal battle with the SEC. Only when the buy side recaptures the 200-day EMA on the daily closing price can the probability of a near-term trend reversal significantly increase.

A sustained break of the 61.8% Fibonacci retracement level at $0.38 is crucial for a true bullish trend reversal. This milestone would increase the probability of revisiting the previous week’s high. To achieve this, a breakout above the critical zone between $0.361 and $0.38 would signal a trend reversal for the bulls.

If successful, the ADA price could eye the local high of $0.399, followed by the next target at the 78.6% Fibonacci retracement level of $0.415. At this point, the fate of Cardano’s upward trajectory will be determined, with a potential push towards the April 15 annual high of $0.463. However, prudent investors should be prepared to take profits if ADA approaches this level.

Beyond these targets, an ongoing bullish scenario opens up possibilities to target the local high of September 10, 2022, at $0.524. Should the bullish momentum remain robust, the high of August 2022 at $0.590 could become the next objective.

Bearish Price Targets

While the upward trend in ADA is evident, a sustainable market structure change has not yet been confirmed. The bears made their presence felt on July 15 by holding the ADA price below the “bear market line” represented by the 200-day EMA. However, the recent 21% correction saw the buy side reclaim control, at least for the time being.

To initiate another sell-off, the bears would need a daily close below the 50-day EMA at $0.311. Until that happens, the bulls can feel relatively secure in their position. A failure to do so may lead to a retest of the support zone between $0.30 and the 23.6% Fibonacci retracement level at $0.296, with further correction potential towards the $0.266 support area.

It is worth noting that the Relative Strength Index (RSI), which initially surged to 72, has since settled into the neutral zone at 54. Generating a fresh buy signal will be crucial for a massive price increase, as an overheated RSI typically accompanies substantial rallies. On a positive note, the Moving Average Convergence Divergence (MACD) indicator triggered a new long signal by crossing above the 0-line, adding to the short-term optimism.

In conclusion, Cardano (ADA) is currently facing crucial hurdles in solidifying its bullish stance. While the potential for a trend reversal exists, ADA needs to overcome resistance levels and maintain positive market sentiment. Prudent investors should closely monitor the price action and consider taking profits if ADA approaches key resistance levels. The blockchain industry continues to evolve, and Cardano’s performance serves as a reflection of the broader market trends and sentiment.

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