Cardano / ADAUSD - Outlook Long term Bullish, Short term Bearish
Hi guys. Welcome to my TA analysis on Cardano. Compared to some cryptos im liking how the charts have been for ADA. Just FYI this is purely Technical Analysis, i do not dive into FA at all and base my trading discussions strictly on TA.
That being said, i do use FA to determine which projects are likely to have strong company dynamics and actual use case when trading cryptos as ive been burned heavy before.
I will also be looking to chart more cryptos moving forward as i believe we are at the beginning stages of the crypto bull market. Make sure to tune in for more info on that in my future analysis.
Lets dive in:
First lets look at PRICE ACTION:
Look at the numbered trend lines i have drawn.
#1 line = Is this major resistance downtrend or "bear market" resistance line that formed from ADA
3 top back in August 2021. \
We have BROKEN OUT and tested it as SUPPORT along with covergence of support forming line #2 this intermediate support trend from Jan 2023.
THIS IS GREAT TO SEE as this means we have have broken the downtrend we were in since 08-2021.
Now does this mean the bottom has formed? Its possible, YES at $0.23 but do notice we can still technically test line #1 and go below $0.23 cents or near it at the least for double bottom even. But that depends on ADA BTC pair relation and how the bull move shapes up in terms of BTC dominance.
#2 line - this is an intermediate support line formed from Jan this year. If we cant stay above line #4 , the red resistance line we can test it at any point as support, im in the camp that maybe thewhite circled area where the 200 Day moving average intersects line #2 is a potential area to look at.
line 2 along with orange arrow forms a upward channel. Notice here how Orange arrow is acting as resistance and todays candle is looking bearish with upper wick.
#3 line - This line is a short term support line where in the coming days we can test, especially if the price action is pushed down by orange arrow.
#4 line - This line was major support back in May 2022, then acted as major resistance recently in Feb. We have to now see how price action acts as we come down to test it. We want to STAY ABOVE.
In the short term i believe we will DEFINITELY test where Lines #3 & 4 MEET. If we can stay above, act as support and bounce up. solid area to Buy in. But remember this could be a temporary fake out to the upside, meaning we are bound to come down. I would need solid confirmation that we stay above these 2 lines.
BUT a major area i would look to enter more positions will be the 200 DMA and line #2. That seems like it would be major support.
INDICATORS:
1. Purple line is the 200 day moving average (dma). Notice how we are above the 200 DMA this is also a great sign as long as we stay above it. The thing to pay attention is how and if/when we react again with this in the near future. We need it to be SUPPORT. I would like it also to start curving upwards, which it may do as we are starting to flatten out.
2. RSI - Important to note we maybe forming a lower high. But price action formed a higher high. This is bearish divergence. Which could push price down, causing price action to interact with drawn lines.
Todays close is important, as we created a peak and are pointed down.
3. ADX and DI - Also shaping up to be bearish divergence. Where bullish momentum is decreasing but price action seems to form higher high recently. Notice the white circled area, the green line is pointing down, showing a decline in bullish momentum
BEARISH DIVERGENCE is when price action is moving up forming higher high shown by the ORANGE arrow but indicators are pointing down forming lower highs also shown by arrow. Price tends to move down over time.
CONCLUSION: I think overall ADA seems more bullish than other ALTS but remember that doesnt mean we can't see lower prices than 0.23 cents and still be in a bull market especially if BTC dominance is strong. It is therefore important to gauge at BTC dominance and BTCADA pairings when going for longer term trades. There are loads of positives for ADA, like breaking the major resistance that was formed during downtrend from3 and testing it as support. There are also alot of support if ADA does move down which just means more buying opportunity especially since i believe we are in the makings of the new bull run. A MAJOR WARNING however and something to watch carefully is the BEARISH DIVERGENCE and if and when it plays out. That could mean short term price drops. Look to the support lines drawn and the 200 DMA. But overall i believe Cardano is starting its bullish run and am long ADA until proven otherwise.
Hope this helped. If you likes what i put out, Please boost, follow and comment. Let me know if you agree or disagree. Stay tuned for updates and more charts on crypto and other assets as well. Look below for related charts especially chart on BTC and recent analysis on another ALT>
DISCLAIMER: This is by no means financial advice. I am not a fiancial advisor. The info expressed here are only my opinion and for educational purposes. When trading please maintain your risk management and protect yourselves with stop loss.
That being said, i do use FA to determine which projects are likely to have strong company dynamics and actual use case when trading cryptos as ive been burned heavy before.
I will also be looking to chart more cryptos moving forward as i believe we are at the beginning stages of the crypto bull market. Make sure to tune in for more info on that in my future analysis.
Lets dive in:
First lets look at PRICE ACTION:
Look at the numbered trend lines i have drawn.
#1 line = Is this major resistance downtrend or "bear market" resistance line that formed from ADA
3 top back in August 2021. \We have BROKEN OUT and tested it as SUPPORT along with covergence of support forming line #2 this intermediate support trend from Jan 2023.
THIS IS GREAT TO SEE as this means we have have broken the downtrend we were in since 08-2021.
Now does this mean the bottom has formed? Its possible, YES at $0.23 but do notice we can still technically test line #1 and go below $0.23 cents or near it at the least for double bottom even. But that depends on ADA BTC pair relation and how the bull move shapes up in terms of BTC dominance.
#2 line - this is an intermediate support line formed from Jan this year. If we cant stay above line #4 , the red resistance line we can test it at any point as support, im in the camp that maybe thewhite circled area where the 200 Day moving average intersects line #2 is a potential area to look at.
line 2 along with orange arrow forms a upward channel. Notice here how Orange arrow is acting as resistance and todays candle is looking bearish with upper wick.
#3 line - This line is a short term support line where in the coming days we can test, especially if the price action is pushed down by orange arrow.
#4 line - This line was major support back in May 2022, then acted as major resistance recently in Feb. We have to now see how price action acts as we come down to test it. We want to STAY ABOVE.
In the short term i believe we will DEFINITELY test where Lines #3 & 4 MEET. If we can stay above, act as support and bounce up. solid area to Buy in. But remember this could be a temporary fake out to the upside, meaning we are bound to come down. I would need solid confirmation that we stay above these 2 lines.
BUT a major area i would look to enter more positions will be the 200 DMA and line #2. That seems like it would be major support.
INDICATORS:
1. Purple line is the 200 day moving average (dma). Notice how we are above the 200 DMA this is also a great sign as long as we stay above it. The thing to pay attention is how and if/when we react again with this in the near future. We need it to be SUPPORT. I would like it also to start curving upwards, which it may do as we are starting to flatten out.
2. RSI - Important to note we maybe forming a lower high. But price action formed a higher high. This is bearish divergence. Which could push price down, causing price action to interact with drawn lines.
Todays close is important, as we created a peak and are pointed down.
3. ADX and DI - Also shaping up to be bearish divergence. Where bullish momentum is decreasing but price action seems to form higher high recently. Notice the white circled area, the green line is pointing down, showing a decline in bullish momentum
BEARISH DIVERGENCE is when price action is moving up forming higher high shown by the ORANGE arrow but indicators are pointing down forming lower highs also shown by arrow. Price tends to move down over time.
CONCLUSION: I think overall ADA seems more bullish than other ALTS but remember that doesnt mean we can't see lower prices than 0.23 cents and still be in a bull market especially if BTC dominance is strong. It is therefore important to gauge at BTC dominance and BTCADA pairings when going for longer term trades. There are loads of positives for ADA, like breaking the major resistance that was formed during downtrend from
3 and testing it as support. There are also alot of support if ADA does move down which just means more buying opportunity especially since i believe we are in the makings of the new bull run. A MAJOR WARNING however and something to watch carefully is the BEARISH DIVERGENCE and if and when it plays out. That could mean short term price drops. Look to the support lines drawn and the 200 DMA. But overall i believe Cardano is starting its bullish run and am long ADA until proven otherwise.Hope this helped. If you likes what i put out, Please boost, follow and comment. Let me know if you agree or disagree. Stay tuned for updates and more charts on crypto and other assets as well. Look below for related charts especially chart on BTC and recent analysis on another ALT>
DISCLAIMER: This is by no means financial advice. I am not a fiancial advisor. The info expressed here are only my opinion and for educational purposes. When trading please maintain your risk management and protect yourselves with stop loss.
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