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Bitcoin’s steady rise from $30,000 was the primary catalyst for most altcoins that have recently experienced steady growth. Cardano’s price has also reflected bullish sentiment, rising from $1 to $1.25 in the last four days alone. Cardano was trading at $1.23 at the time of writing, up 2% in the previous 24 hours.
Cardano Daily Chart
ADA’s daily chart showed a descending channel breakout with gains of nearly 9% from the pattern’s upper trendline. The next level of resistance was at $1.25, which also coincided with the 20-SMA (red).
Stabilization on the cards?
Prices rose back above their daily 200-SMA (green) following ADA’s move above its up-channel, but only on low volumes. This reduced the likelihood of ADA rising in the coming days. Instead, prices may settle in a $1.19-$1.25 channel in the coming days before continuing to rise. If the price does not rise above $1.25 in the next 24 hours, this outcome is confirmed.
Despite ADA’s steady rise, its Relative Strength Index remained below 50, indicating that bulls had yet to seize control of the market. This has been the case since the market crashed on May 19. The Directional Movement Index did converge, but the -DI remained higher than the +DI because a bearish trend had yet to be reversed.
Furthermore, the ADX was pointing south, and a move below 25 would indicate some lateral movement. The Squeeze Momentum Indicator did show a decrease in bearish momentum, but it was still below the half-line. Prices may remain constrained until the indicators develop a clearer direction, and if bulls prevail, ADA’s next target was at $1.33 and the 50-SMA (yellow).
Over the next few days, ADA may move sideways between $1.19 and $1.25 as bulls prepare for an upward breakout. Meanwhile, traders can go long once ADA reaches the lower end of this range and exit when prices reach the upper limit of $1.33. However, because the overall trend was still bearish, one should be wary of some minor losses.