ADA needs to recapture the $ 1.45-1.47 area to hit an uptrend

Cardano (ADA) printed a series of equal lows in the $ 1.20 support area. Despite multiple tests in this area, buyers haven’t given up and have actually been able to push the price above the lower timeframe in the past few days, following a descending triangle pattern.

ADA price has been constrained near its recent three-week low of $ 1.20 and it remains to be seen whether it will gain enough momentum to bounce back. A rising Bitcoin price could increase the pressure to buy.

Source: TradingView

On the 4-hour chart, ADA is hovering above the descending trendline that has been acting as resistance since November. On the lower time frames it has formed a descending triangle pattern with a top high, the December low and support is at $ 1.20.

The range between $ 1.28 and $ 1.32 (red box) has created some resistance in the past few days, but ADA is trading within that range at the time of writing.

Using the Fibonacci tool shows that there was a 23.6% retracement during the move from $ 2.37 to $ 1.20 with the high time frame (HTF) horizontal resistance at $ 1.45 la collapsed, making it a critical level for the cops to regain.

Although selling pressure has increased significantly in recent months, it is possible that the market is moving in the opposite direction.

Theoretical basis

Source: TradingView

On the price chart we see that the SMA 21 (orange) rises above the SMA 55 (green), which indicates a possible trend reversal. The MACD has also formed a bullish crossover and is about to cross the zero line, again showing bullish momentum.

The Awesome Oscillator (AO – an indicator that measures the price movement of the market) made a higher low even when the price was showing equal lows, representing a bullish divergence.

Contrary to the change in momentum, no buying has yet occurred. A significant buying volume must support a change in momentum and the Volume Balance (OBV) indicator shows that buyers have no control over the market.

Conclude

The contrast between the dynamics and volume of the indicators shows that ADA may not have instilled confidence among investors. A 23.6% retake coupled with a significant volume of purchases would be strong evidence of a bullish market.

ADA price action suggests that a potential breakout in a low time frame could help price regain the $ 1.45-1.47 area, a key area for bulls to show strength.

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