Cardano (ADA) forms a symmetrical triangle and large price fluctuations are inevitable. Specific prices have been set for traders ready to buy (or sell) after a breakout. At the time of writing, ADA is trading at $ 2.24, down 1.2% over the past 24 hours.
Source: TradingView
ADA has been waiting for a breakout of nearly 30% either way based on the high of $ 2.43 and the low of $ 2.06 in the pattern. The 4 hour time frame is also used to identify key swing highs and swing lows that may confirm a breakout. For the bulls, a strong close above the confluence of 200 SMA (green) and the October 7th high of $ 2.37 will increase the advantage.
After this development, traders can buy long positions and set a take profit between USD 2.96 and USD 3. Keep in mind that ADA needs to break the $ 2.58 and $ 2.8 resistance areas to maximize profits. Meanwhile, a stop loss can be placed below the October 6th high of $ 2.11.
On the other hand, a close below the 20 SMA (red) could break the pattern. Short sellers can place a bet if ADA falls below the $ 2 mark and get a reasonable take profit of $ 1.87, which translates into a 7% profit. While a 25% collapse will result in lower profit taking for short sellers, the broader market that could prevent ADA from falling to $ 1.50 is at risk.
If the ADA now moves sideways between USD 2.31 and the 20 SMA (red) next week, the chances of a breakout will be greatly reduced.
The squeeze momentum indicator shows that the market has been flooded with bullish pressure. However, traders must refrain from taking positions until the index detects a “squeeze”. The Directional Movement Index (DMI) and the MACD are also very cheap.
Another factor that traders can keep a close eye on is the 24-hour trading volume. During a bullish breakout, the spot volume on the exchanges usually spikes sharply. On the contrary, the volume remained small at the beginning of the collapse.
With indicators rising, the bulls come out on top to break out in their favor. For the best results, it could even see ADA rise to $ 3 before bears intervene. However, the possibility of a bearish collapse is not ruled out. Traders should monitor the above metrics along with trading volume for better understanding.
You can see the ADA prices here.
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Disclaimer: This article is for informational purposes only, not investment advice. Investors should research carefully before making a decision. We are not responsible for your investment decisions.
Annie
According to Ambcrypto
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