Cardano price provides bulls and bears equal opportunity for next week, here’s how to capitalize on it
|- Cardano price has slowed down, resulting in a 17% collapse in the last six days.
- ADA could revert to the mean at $0.420 if it manages to form a solid base over the weekend.
- The targets for ADA include the $0.432 to $0.440 bearish breaker to the upside and the $0.353 to $0.366 FVG to the downside.
Cardano price is at an interesting point in its bull rally. After a non-stop uptrend from March 9, ADA has produced a market structure shift favoring the bears. Now, the smart contract token is deciding if it will continue heading lower or pull back before continuing its descent.
Read more: Cardano whale activity signals this move in ADA price
Cardano price and its bearish outlook
Cardano price has shed nearly 17.5% from its local top at $0.461 in the last six days. This move comes after a continued uptrend from March 9, which led to a 55% gain for ADA holders. As the smart contract token hovers around $0.385, there are a few ways in which the price action could resolve.
Cardano price consolidates around its current position over the weekend but resumes its descent over the next week.
Or ADA would tag $0.420, which provides us with a mean reversion play. If this outlook does play out, investors need to watch for the $0.402 hurdle. Clearing this barrier would open the path for ADA to retest the midpoint at $0.420. But the main attraction during this retracement is the bearish breaker, extending from $0.432 to $0.440, which also encloses a Fair Value Gap (FVG), stretching from $0.425 to $0.435.
For information on Bearish Breaker setups and FVGs, read this - Where will the 2023 crypto bull rally top? – ICT
A retest of the Bearish Breaker will allow bears an opportunity to enter a short position before Cardano price continues its descent. In such a case, investors can expect ADA to tag the FVG to the downside, extending from $0.353 to $0.366.
In the best-case scenario, this short position would yield a 13% gain.
ADA/USDT 1-day chart
Invalidation of the bearish thesis would occur if Cardano price rejects at the $0.402 hurdle and prematurely tags the $0.353 to $0.366 FVG to the downside. In such a case, investors need to be prepared for a reversal inside the FVG’s aforementioned range.
This move would allow bulls to position long and ride the pullback that tags the $0.432 to $0.440 Bearish Breaker that encloses the $0.425 to $0.435 FVG. This move would constitute a 15% gain for ADA holders.
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