• Cardano price shed 21% of its value this week. 
  • Bulls stepped in to stop the price correction, using a critical historical level from May 9.
  • Price action in ADA looks to have flipped to the upside with a possible 16% profit return.

Cardano (ADA) price has been on a downward trajectory since the beginning of this week after ADA twice broke a supporting ascending trend line. With those two supportive elements so close to each other, sellers had two excellent entries to play out their short positions. Bulls now have caught the correction and are starting to squeeze out sellers as bears book profits on their shorts positions.

Cardano price is caught by bulls and stands to jump 16%

Cardano price in a concise time frame has broken two supporting elements that kept the bull-run in check. As buyers got washed out of their positions, sellers had the upper hand and could efficiently run prices in ADA down with a 21% correction as a result. Bulls, however, stepped in today and are starting to turn the trend as price action in Cardano is lifted from $1.89.

That orange horizontal line has already proven its importance in the past. Before the summer, the level acted as resistance and kept price action limited to the upside. Once after the break on August 13, the resistance factor switched to a support element and returned 68% to the bulls at one point. That level still holds as support, and ADA has been trading slightly higher since. 

ADA price looks to turn in favor of the bulls, and with global sentiment returning in favor of risk-on, expect more upside toward $2.30. After that, it starts to get tricky, with the green ascending trend line and the 55-day Simple Moving Average (SMA) acting as resistance. Bulls will have to overcome these two hurdles and need an external catalyst to break above these levels.

ADA/USD daily chart

ADA/USD daily chart

That catalyst for a higher Cardano price can be the FOMC meeting later this evening. If Powell spells to the markets that financial conditions will not tighten too quickly and US growth has more free room to grow, investors will start buying more risk-on assets on sight. This will be a very favorable tailwind for cryptocurrencies in general and will push ADA price above $2.40.

Should some events take a turn for the worse, like a default in Evergrande or equity markets dipping after a hawkish tone from the FOMC, expect bulls to get squeezed out of their long positions, and sellers will go for a full-blown correction to $1.70, wiping out almost 40% of additional price action in Cardano. 


 

Like this article? Help us with some feedback by answering this survey:


Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Recommended content


Recommended Content

Editors’ Picks

Top 3 Price Prediction Bitcoin, Ethereum, Ripple: BTC declines as resistance emerges near all-time high

Top 3 Price Prediction Bitcoin, Ethereum, Ripple: BTC declines as resistance emerges near all-time high

Bitcoin and Ethereum are approaching their key support levels, and a sustained close below these marks could lead to further declines. 

More Cryptocurrencies News
TON set to launch synthetic Bitcoin to boost its DeFi solutions

TON set to launch synthetic Bitcoin to boost its DeFi solutions

TON revealed its plan on Thursday to launch a synthetic Bitcoin token on its blockchain, allowing users to trade, stake, and earn yield using BTC. Following the announcement, TON is down over 3%.

More Ton News
Maker Price Forecast: MKR could stage 40% rally

Maker Price Forecast: MKR could stage 40% rally

MakerDAO is up 2% on Thursday and could be set for a 40% rise in the coming weeks if it successfully maintains an extended move above the descending trendline of a falling wedge. On-chain data also supports the bullish outlook after a four-month-long decline.

More MakerDAO News
USDT market cap crosses $120 billion as stablecoins continue their uptrend

USDT market cap crosses $120 billion as stablecoins continue their uptrend

The stablecoin market cap continued its uptrend in October, characterized by USDT reaching a $120 billion market cap, according to a CCData report on Thursday. This indicates that investors are preparing liquidity to fuel more demand.

More USDT News
Bitcoin: New all-time high at $78,900 looks feasible

Bitcoin: New all-time high at $78,900 looks feasible

Bitcoin price declines over 2% this week, but the bounce from a key technical level on the weekly chart signals chances of hitting a new all-time high in the short term. US spot Bitcoin ETFs posted $596 million in inflows until Thursday despite the increased profit-taking activity.

Read full analysis
Best Forex Brokers with Low Spreads

Best Forex Brokers with Low Spreads

VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.

Read More

BTC

ETH

XRP