Cardano price technical analysis as a double-top forms

1 year ago 84

Cardano (ADA/USD) price made a smooth recovery during the overnight session despite the extremely hawkish Fed minutes. After crashing to a low of $0.378, Cardano bounced back to $0.40 as investors attempted to buy the dip. It has surged by over 65% this year, making it one of the top-performing major cryptocurrencies this year.

ADA Technical analysis

For this article, I will focus on Cardano’s technicals instead of fundamentals. Starting from the four-hour chart, we see that ADA price rose and found significant resistance at around $0.42 last weekend. This price coincided with the fact that Bitcoin also rose to over $25,200 for the first time in months.

Cardano then pulled back as the fear and greed index slumped amid worrying interest rates concerns. Therefore, the current pullback is mostly because of a situation known as buying the rumour, and selling the news. In other words, investors sold Cardano before the Fed minutes and then bought when their fear was confirmed.

Cardano has now jumped and crossed the important resistance point at $0.390, the lowest point on February 20th of this year. It has also moved slightly above the 23.6% Fibonacci Retracement level and moved above the 50-day moving average.

However, broadly, the coin has formed a double-top pattern at around $0.41. Its neckline is at $0.347. Therefore, at this stage, there is a likelihood that the coin will have a bearish breakout in the coming days, with the initial level to watch being at $0.35, the 38.2% retracement level. A break below that level will see it crash to the next key support at $0.329, the 50% retracement point.

In the near term, the bearish view will only be invalidated if Cardano manages to move above the double-top level of about $0.42.

Cardano price daily chart analysis

Turning to the daily chart, we see that Cardano has struggled to move above the key resistance point at $0.419. Like in the four-hour chart, it has formed what looks like a double-top pattern. It has also moved above the 25-day and 50-day moving averages. In this chart, it is hovering near the 50% Fibonacci Retracement level.

What is most important is that the pair is still being supported by the 25-day and 50-day moving averages. Therefore, this means that the bullish trend will remain steady as long as it is above these MAs. A cross above the double-top pattern will mean that bulls have prevailed and see it continue soaring.