Cardano, or ADA as it is also known, has lagged behind the rest of its competitors in this ongoing bull run. Bitcoin’s price has increased. surged to record new all-time highsADA is still approximately 77% under its historic peak, along with a range of altcoins. However, new technical patterns and changes in market dynamics indicate that the trend may be about to reverse, as ADA could gear up to close the gap.
Cardano Bull Flag Form: In Depth Look
The bull flag pattern on the weekly chart of the ADA/USD is central to the analysis. The chart is the central part of this analysis. bull flag pattern The flagpole is the first element. Flagpoles are a sign of a steep vertical rise in prices, which represents a sudden increase in purchasing pressure. The ADA flagpole formed between mid-October and mid-December. It represents a roughly 185% rise.
Following the pole is a consolidation period with a slope downward, similar to a flag on pole. The pole for ADA developed between mid-December and early February. Often, a breakout over the flag will lead to a subsequent price rise proportional to the height of the original pole.
Cardano’s price has already broken through and passed the critical resistance of $0.685. ADA’s rally will not be over if it continues to follow this playbook. If ADA continues to follow this technical playbook, the rally is far from over.
Cardano’s price has to first surpass the $0.92 Fibonacci level, which is an area of greater pressure on the market and possible a faster consolidation.
Golden Cross and More Bullish Arguments
It also teases the formation a golden crossWhen a 50-week moving average crosses above a 200-week EMA, it is a positive signal. Crossovers of this type can signal a long-term shift from bearishness to bullishness. They are more significant on weekly charts, as they filter out the short-term noise.
This crossover is often viewed by traders as confirmation that a trend has reversed, and can be used to stimulate sustained buying. This could be the last confirmation for ADA of a bullish move.
The weekly chart of ADA tells a much broader story. The Relative Strength Index sits at 74 just over the threshold for being considered to be “overbought”, which means that there is still room on the upside.
Although the volume is lower than in the peak period of 2021 it remains consistent. This suggests a steady interest in ADA without panic selling as seen when sharp drops occur.
ADA trades above the Exponential Moving averages of 20-weeks, 50-weeks, 100-weeks, and 200 weeks. Notably, 200-week EMA acted very strongly as a support for price recently, indicative of a bullish long-term sentiment.
The 50-week EMA has a trend upwards, which may solidify the support levels on a medium term basis. The 200-week EMA is further down, and the 100-week EMA even lower. These could serve as support levels for a long time in the event of a price retracement.
The Fibonacci retracement level drawn from the high of the ADA to its low provides long-term targets. After the bull flag, the $1.697 0.5-level, which marks the half way point between the swing from high to low could be used as an intermediate price target. next Bulls’ target price. Next, price targets would include the 0.618 Fib, $2.04; the 0.786Fib, $2.54; and, finally, $3.17, which is the highest point in history.
The bullish story for Cardano is not only based on the rising bull flag, but also other indicators such as RSI and Fibonacci.
Chart from TradingView.com, image from Shutterstock
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