Cardano consolidation continues, ADA awaits a clear breakout to $4.00

• Cardano price is extremely bearish within the Ichimoku Kinko Hyo system – but little follow-through selling is occurring.
• Opportunities to go long exist.
• Time cycles point to an imminent major move.

Cardano price action remains constricted and flat. The last significant move for Cardano was on October 27th, when price fell from $2.13 to $1.90. Since then, Cardano has struggled to maintain the $2.00 level.

Cardano price shows an early entry opportunity

Cardano price shows an early entry opportunity on the long side of the market. The $0.01/3-box Reversal Point and Figure chart below (left) shows a hypothetical long entry with a buy stop order at $2.05, a stop loss at $2.01, and a projected profit target at $2.15. Two major technical events would occur simultaneously at the entry: confirmation of a Bearish Fakeout pattern and a conversion from a bear market to a bull market.

While the risk to reward for Cardano price may seem lacking on the $0.01/3-box chart, the $0.02/3-box chart shows a similar but potentially more profit setup. The entry idea on the $0.02/3-box chart is based on a Pole Pattern, and therefore the entry essentially trails the current column of Os . As a result, the entry is on the 3-box reversal from the current column of Os, the stop loss is four boxes below the entry, and the profit target, based on the Vertical Profit Target Method in Point and Figure Analysis, is at $2.54.

ADA/USD $0.01/3-box (left) and $0.02/3-box (right) Reversal Point and Figure Charts

Both Point and Figure charts have invalidation levels to watch for. The long idea on the $0.01/3-box chart is invalidated if a new column Os develops and moves below $1.92. For the $0.02/3-box chart, invalidation of the entry will occur only if a new O-column develops after the long entry.

 

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