ADA/USD - Death Spiral or ATH Springboard?
Actualizado
Whether the broader market, and ADA, is declining into a "crypto winter" or death spiral is a valid question to ask, especially when prices are well below a recent ATH.
With TA we can only look at probabilities among possibilities. A drawn out consolidation is possible. However, RSI and LSMA remain high in timeframes 10 days and above. In most timeframes, green EMA has not yet reached level 50. This suggests that there is a limit to how far prices could fall, and that a drop well below 1.00 (e.g., 0.70 would require downward momentum to stay in control for 2 more months at least. That would require the longest downward momentum cycle for ADA since summer of 2019, when Cardano and its market was much less mature and in a bear cycle.
The most likely scenario is that prices bottom out around 1.00 (with a potential wick down to 0.95 area), which is a retracement of 60% from the 2.47 ATH last month.
There is enough upward momentum remaining in mid-term and longer timeframes to allow ADA to make a strong bounce back to 2.00 and higher.
For that to happen the current downward momentum must exhaust and we will need to see confirmation of a reversal. This may happen after the current consolidation tests 1.00, or it may require one or two more tests of 1.00. However, it is likely that we are two-thirds or more though this retracement. ADA above 2.00 could happen quickly on a strong bounce, but more likely will happen in July or August.
The overall picture for ADA remains bullish. The bull cycle has not been broken yet, and is more likely to rebound than not.
Recommendations are to consider the buying zone around 1.00 (+/- 10 cents) and be patient for the next 2-6 weeks.
Good luck and good fortune!
With TA we can only look at probabilities among possibilities. A drawn out consolidation is possible. However, RSI and LSMA remain high in timeframes 10 days and above. In most timeframes, green EMA has not yet reached level 50. This suggests that there is a limit to how far prices could fall, and that a drop well below 1.00 (e.g., 0.70 would require downward momentum to stay in control for 2 more months at least. That would require the longest downward momentum cycle for ADA since summer of 2019, when Cardano and its market was much less mature and in a bear cycle.
The most likely scenario is that prices bottom out around 1.00 (with a potential wick down to 0.95 area), which is a retracement of 60% from the 2.47 ATH last month.
There is enough upward momentum remaining in mid-term and longer timeframes to allow ADA to make a strong bounce back to 2.00 and higher.
For that to happen the current downward momentum must exhaust and we will need to see confirmation of a reversal. This may happen after the current consolidation tests 1.00, or it may require one or two more tests of 1.00. However, it is likely that we are two-thirds or more though this retracement. ADA above 2.00 could happen quickly on a strong bounce, but more likely will happen in July or August.
The overall picture for ADA remains bullish. The bull cycle has not been broken yet, and is more likely to rebound than not.
Recommendations are to consider the buying zone around 1.00 (+/- 10 cents) and be patient for the next 2-6 weeks.
Good luck and good fortune!
Nota
Also a reminder that very soon I will start travelling again. Updates will be limited in July, especially between July 11 and 21 when I will be essentially off the grid.
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