- Cardano (ADA) has recently showcased signs of a potential trend reversal, following an impressive 48% rally from its low in June.
- Despite the hurdles ahead, if ADA can maintain its upward trajectory, it could reach unprecedented highs.
Cardano (ADA) Signals Potential Reversal Amid Rally
Cardano (ADA), a popular cryptocurrency, has been a whirlwind of ups and downs. Recently, however, it’s been showing signs of a potential trend reversal following a remarkable 48% rally from a low of $0.221 in June. This rally was partially powered by the positivity radiating from Ripple’s ongoing legal tussle with the SEC.
Despite the excitement amongst bullish investors when the price surged to the 61.8% Fibonacci retracement level, ADA’s value struggled to stay above the 200-day EMA (Exponential Moving Average), represented by the blue line.
ADA’s Journey Towards A Bullish Stand
ADA made a crucial correction back to the breakout level at $0.30. From here, bullish traders found their footing, pushing the price above the EMA50 (the 50-day moving average represented by the orange line).
To further the bullish narrative, ADA must overcome a few obstacles. The initial key resistance is at the 38.2% Fibonacci retracement level, pegged at $0.328. If ADA successfully surpasses this, a path towards the $0.355 mark – and the 200-day EMA’s significant challenge – becomes a real possibility.
However, a push from the broader crypto market, perhaps influenced by Bitcoin or more positive developments in the Ripple-SEC case, will likely be required for this to occur. A substantial trend reversal only becomes probable when the buy-side can secure the 200-day EMA on the daily closing price.
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For a definitive bullish trend reversal, a break of the 61.8% Fibonacci retracement level at $0.38 is critical. Achieving this would pave the way towards revisiting the previous week’s high, given a breakout above the crucial zone between $0.361 and $0.38.
Should this occur, the ADA price might aim for the local high of $0.399, with the next target being the 78.6% Fibonacci retracement level at $0.415. This will be a pivotal point, deciding whether ADA’s upward trajectory continues towards the annual high of $0.463 marked on April 15. Prudent investors, however, are advised to take profits if ADA approaches this level.
On the bearish side, while an upward trend is apparent, a concrete market structure change is not yet confirmed. Bears held their ground on July 15, keeping ADA price below the “bear market line” denoted by the 200-day EMA. A daily close below the 50-day EMA at $0.311 is needed to initiate another sell-off.
In terms of indicators, the Relative Strength Index (RSI) initially surged to 72 but has since settled at a neutral 54. A new buy signal is essential for a significant price increase. The MACD indicator recently triggered a new long signal, contributing to short-term optimism.
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