• Cardano price action is exceptionally oversold compared to its peers.
  • Strong bullish reversal incoming as late-entry short sellers now trapped.
  • Excellent long entry opportunity for ADA is incoming.

Cardano price may be at the beginning of a move that could see it lead the broader cryptocurrency market on a fantastic rally over the next six months. Having spent most of the last quarter of 2021 in a downtrend, Cardano is poised for some monumental gains.

Cardano price develops a powerful bullish trade setup on its Point and Figure chart

One of the most robust and reliable Point and Figure trade patterns is the Fake Out. A Bullish Fake Out pattern develops after a multiple bottom has a breakout that moves at least – but not more than – two Os below the multiple bottom. Next, there must be a reversal column of Xs. Finally, the long entry is at 50% of the range of the previous O column.

For Cardano price, the theoretical long entry is a buy stop order at $1.30, a stop loss at $1.10, and a profit target at $2.25. The profit target is based on the Vertical Profit Target Method in Point and Figure analysis. The possible trade setup is a 4.75 reward/risk trade setup with an implied profit target of 79% from the entry. A three-box trailing stop would help protect any implied profit.

ADA/USDT $0.05/3-box Reversal Point and Figure Chart

Downside risks, however, do remain. For example, any daily or weekly close below the $1.00 value area would probably trigger a flash crash through an extremely thing volume profile to the next high volume node and cluster of support at $0.40. In that scenario, Bitcoin would likely be trading near $30,000 and Ethereum near the $2,250 price range.

The theoretical long setup for Cardano price is invalidated if the current O-column moves lower to $1.00.

 


Note: All information on this page is subject to change. The use of this website constitutes acceptance of our user agreement. Please read our privacy policy and legal disclaimer. Opinions expressed at FXstreet.com are those of the individual authors and do not necessarily represent the opinion of FXstreet.com or its management. Risk Disclosure: Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.

Recommended content


Recommended Content

Editors’ Picks

IRS says crypto staking should be taxed in response to lawsuit

IRS says crypto staking should be taxed in response to lawsuit

The IRS stated that rewards from cryptocurrency staking are taxable upon receipt, according to a Bloomberg report on Monday, which stated the agency rejected a legal argument that sought to delay taxation until such rewards are sold or exchanged.

More Cryptocurrencies News
Solana dominates Bitcoin, Ethereum in price performance and trading volume: Glassnode

Solana dominates Bitcoin, Ethereum in price performance and trading volume: Glassnode

Solana is up 6% on Monday following a Glassnode report indicating that SOL has seen more capital increase than Bitcoin and Ethereum. Despite the large gains suggesting a relatively heated market, SOL could still stretch its growth before establishing a top for the cycle.

More Solana News
Ethereum Price Forecast: ETH risks a decline to $3,000 as investors realize increased profits and losses

Ethereum Price Forecast: ETH risks a decline to $3,000 as investors realize increased profits and losses

Ethereum is up 4% on Monday despite increased selling pressure across long-term and short-term holders in the past two days. If whales fail to maintain their recent buy-the-dip attitude, ETH risks a decline below $3,000.

More Ethereum News
Crypto Today: BTC hits new Trump-era low as Chainlink, HBAR and AAVE lead market recovery

Crypto Today: BTC hits new Trump-era low as Chainlink, HBAR and AAVE lead market recovery

The global cryptocurrency market cap shrank by $500 billion after the Federal Reserve's hawkish statements on December 17. Amid the market crash, Bitcoin price declined 7.2% last week, recording its first weekly timeframe loss since Donald Trump’s re-election. 

More Cryptocurrencies News
Bitcoin: 2025 outlook brightens on expectations of US pro-crypto policy

Bitcoin: 2025 outlook brightens on expectations of US pro-crypto policy

Bitcoin price has surged more than 140% in 2024, reaching the $100K milestone in early December. The rally was driven by the launch of Bitcoin Spot ETFs in January and the reduced supply following the fourth halving event in April.

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