ADA trades in a tight range and a big move could follow
Cardano (ADA) is attempting a breakout above the descending parallel channel that has formed since the all-time high. If successful, it may retest the resistance of the $ 1.92 to $ 2.38 range.
Until ADA breaks out of this range, the direction of the trend remains undetermined.
- Key Support Level: $ 1.92
- Key Resistance: $ 2.38
Daily ADA / USDT Chart | Source: TradingView
Volume: The volume remains low, especially at the end of the week. However, the breakout on the descending channel was followed by a surge in volume, showing that buyers are still interested in ADA.
RSI: The RSI remains bearish in key time frames (daily and weekly). In the weekly timeframe, the RSI has made a lower high and a clear bearish divergence since February 2021 (yellow arrow).
MACD: The MACD has just formed a bearish cross in the weekly timeframe. This is not a positive sign for the bulls as when this signal appeared earlier it took the pair more than two months to resume its uptrend.
Weekly ADA / USDT Chart | Source: TradingView
Technical indicators and price action suggest that ADA could consolidate in the $ 1.92-2.38 range for a while before breaking out.
The longer the range moves, the greater the movement after the breakout. Hence, traders will need to keep a close eye on resistance and support levels in the $ 1.92-2.38 area to benefit from the trend.
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According to Cointelegraph