Crypto News- Cardano Price Finds Local Bottom,has been showing signs of recovery after successfully completing a bullish pattern on September 11th, coupled with a breakout from a long-established descending resistance line. However, the ADA/BTC pairing continues to face a bearish outlook.
Cardano Price Finds Local Bottom – Is a Move Toward 0.30 Dollars in the Cards?
A comprehensive analysis of the daily timeframe indicates that ADA managed to break free from a descending resistance line that had been restricting its movements since July 14th. During its journey along this line, Cardano’s price had dipped to a low of $0.24 on August 17th. Notably, on September 11th, it revisited this price level and experienced a bounce, effectively forming a double bottom pattern.
This pattern is typically regarded as bullish, often signaling an imminent upward price movement. The significance of this pattern is further accentuated by the Relative Strength Index (RSI) readings. Traders often employ the RSI as a momentum indicator to evaluate overbought or oversold conditions and make informed decisions about asset accumulation or liquidation.
An RSI reading above 50, especially in conjunction with an upward trend, is generally seen as favorable for bullish sentiment, whereas a reading below 50 suggests a bearish sentiment. At present, the RSI is on an upward trajectory and is nearing the 50 threshold. Additionally, it has demonstrated notable bullish divergence (indicated by the green line).
Bullish divergence occurs when a price decline coincides with an increase in momentum, frequently preceding upward movements. With ADA seemingly having broken free from the descending resistance line, a potential target lies at $0.30, approximately 25% above the current price.
However, if the anticipated upward movement fails to materialize, ADA could potentially experience a 10% decline towards its yearly lows at $0.22.
ADA’s Struggle Against Bitcoin (BTC):
While the ADA/USD chart suggests a bullish outlook for ADA’s price, ADA’s performance against Bitcoin (BTC) presents a different narrative. The price action against BTC exhibits a descending triangle pattern, which typically indicates a bearish trend. Furthermore, the daily RSI for ADA/BTC is bearish, currently situated below the 50 threshold and displaying a downward trend.
Should a breakdown occur, encompassing the entire height of the triangle (as indicated by the white lines), it could lead to a 23% decline, pushing ADA’s price down to 700 satoshis. Conversely, a breakout could result in a 15% increase, targeting the next resistance level at 1100 satoshis. As things stand, a breakout scenario appears less likely in this context.
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