Cardano: Evaluating if a move upward could be around the corner

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Dis­claimer: The infor­ma­tion pre­sent­ed does not con­sti­tute finan­cial, invest­ment, trad­ing, or oth­er types of advice and is sole­ly the opin­ion of the writer.

Bit­coin [BTC] fought its way back above the $20k mark after floun­der­ing about the $19.8k mark the pre­vi­ous day, to trade at $21.1k at press time. Car­dano [ADA] has been trad­ing with­in a range for a lit­tle over a month now. This pre­sent­ed a chance for traders to enter the mar­ket when the price reached either extreme of the range. Car­dano saw a bounce from the range lows at $0.44 and pre­sent­ed a pos­si­ble buy­ing oppor­tu­ni­ty in a low­er timeframe.

ADA- 1 Day Chart

Cardano trades within a range but a move upward could be around the corner

Source: ADA/USDT on TradingView

On the dai­ly time­frame, ADA had trad­ed between the $0.44 and $0.65 sup­port and resis­tance lev­els for near­ly six weeks. The mid-point of the range lay at $0.54, and ADA exchanged hands at $0.49 at press time.

The mid-range rep­re­sent­ed a tough resis­tance to the bulls, along­side the range highs. There­fore, the mid-range lev­el at $0.54 can be used to take prof­it on any buys from low­er down the charts.

Anoth­er fac­tor that the dai­ly time­frame unearthed was that the $0.488-$0.5 area act­ed as resis­tance. The cur­rent trad­ing ses­sion was with­in this area but had not yet faced rejection.

ADA- 1 Hour Chart

Cardano trades within a range but a move upward could be around the corner

Source: ADA/USDT on TradingView

The hourly time­frame showed the $0.49 lev­el to have some impor­tance over the past week, as it has act­ed as both a sup­port and resis­tance to ADA. More­over, on the low­er time­frames, the $0.5 was for­mi­da­ble resis­tance over the past few days. In the same time peri­od, the price has formed high­er lows as it pushed toward the resistance.

Ergo, the low­er time­frame bias was bull­ish. The two Supertrend indi­ca­tors also agreed as they flashed a buy sig­nal for ADA on the hourly chart. But where would an ide­al entry be?

Cardano trades within a range but a move upward could be around the corner

Source: ADA/USDT on TradingView

The Sto­chas­tic RSI, in con­junc­tion with the Supertrend indi­ca­tor, can be used to time a low­er time­frame entry. At press time, the Sto­chas­tic RSI formed a bear­ish crossover and head­ed low­er. If it reach­es the over­sold ter­ri­to­ry, traders can watch ADA more close­ly. A bull­ish crossover in over­sold ter­ri­to­ry, while ADA remained above the Supertrend indi­ca­tors on the H1 time­frame, could be used to enter a long position.

To sup­port the bull­ish notion, we have both the RSI and the AO show­ing bull­ish momen­tum. The RSI rose above the neu­tral 50 line and has stayed above it. The Awe­some Oscil­la­tor (AO) was also above the zero line.

At the same time, the OBV has steadi­ly climbed high­er. This sug­gest­ed the pres­ence of buy­ing pres­sure behind Car­dano in the past few days.

Conclusion

Above the hourly time­frame, the $0.54 area was high­light­ed as a strong resis­tance lev­el. On the hourly time­frame, the $0.488-$0.5 area could offer traders an oppor­tu­ni­ty to buy ADA, with a bull­ish tar­get of $0.53-$0.54 to take prof­it at. A stop-loss just beneath the $0.478 mark can be set. A ses­sion close below $0.48 would break the pre­vi­ous high­er low, and flip the struc­ture to bearish.

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