Cardano (ADA) Forms Local Resistance As It Readies For Another 40% Liftoff

Cardano (ADA) has been on the receiving end on some of the most brutal beatdowns the crypto market has dished out in recent times. The cryptocurrency had managed to grow from about $0.20 at the beginning of 2021 to a high of $3, which saw investors cashing out massive gains. However, the trip down would prove to be just as swift and impactful as the trip up.

ADA has since lost about 60% of its all-time high value, falling below $1 for the first time in eight months. Since the digital asset has spent such a long time in a downtrend, there looks to be nowhere to go but up as ADA plots its move upwards after forming a local resistance point.

ADA Ready For Takeoff

After a long time in a downtrend, ADA has finally formed a local resistance. With this resistance, the digital asset is looking towards a liftoff from this point. One thing to note is that even when the rest of the market had begun to rebound, Cardano had continued to trend low. Momentum stayed down, translating to no meaningful movement despite the market gaining over $200 billion in a single weekend.

5 BTC + 300 Free Spins for new players & 15 BTC + 35.000 Free Spins every month, only at mBitcasino. Play Now!

Related Reading | Cosmos Records 20% Gain, What’s Behind The Boom In Its Ecosystem

A look at the charts shows that this may have positive connotations for the value ADA going forward. For instance, ADA is now trading in a support zone between $0.90 and $1.20, as illustrated in this analysis by a trader. It is doing this while the rest of the market is already recovering significant portions of its lost value during the crash, showing that it has indeed formed local support.

Cardano To Bounce 40%

Looking at the past, a few things of note show that this is an important point for Cardano. One of these is the historical data that outlines what ADA has done after forming a local resistance. Like clockwork, the price of the digital asset has been able to bounce up from its support zone the past three times this has happened. There is nothing to suggest that this cannot happen for the fourth time.

Get 110 USDT Futures Bonus for FREE!

Cardano (ADA) price chart from

ADA readies for takeoff | Source: ADAUSD on

Furthermore, the local strong resistance zone happens to coincide with the 0.3 Fibonacci correction level, indicating that the digital asset is currently undervalued. Sticking with this analysis, ADA may see a 35% to 40% bounce upward from its current point if history repeats itself. This will catapult ADA out of its current trend, breaking through months of low momentum towards the $1.55 to $1.65 point, where it will form another local resistance zone.

Related Reading | Cardano Zooms Up By 6%; How Soon Will It Target $1.4?

The rest from here on out is mainly a waiting game. The network is seeing increased adoption due to its first major DEX, SundaeSwap, launching on the blockchain. As ADA usage on the network grows, so does the likelihood of a bounce.

Featured image from The Balance, chart from


Tagged : / / / / / /

Cardano price eyes $3, but ADA chart fractal hints at a potential 40% correction

Cardano blockchain’s native asset, ADA, reached a new record high on Monday as investors pinned hopes on an upcoming smart contracts feature that expects to boost the cryptocurrency’s adoption.

The ADA/USD exchange rate topped out at $2.899 around 9:00 am UTC, raising anticipations that it would easily close above $3 in the coming sessions.

Many analysts, including pseudonymous chartist PostyXBT, noted that the Cardano token had entered a “price discovery mode.” Meanwhile, David Gokhshtein hinted that ADA/USD might continue its bull run until Sep. 12, the day Cardano is going to integrate a smart contracts feature to its blockchain via the “Alonzo” upgrade.

In detail, the Alonzo upgrade introduces a native smart contracts development language called Plutus to the Cardano ecosystem. Plutus is already available for testing and brings functional programming to smart contract creation to everyday users.

[embedded content]

As a result, ADA bulls anticipate the token’s adoption to boom in the sessions ahead as Cardano attracts decentralized application developers — operating in the emerging decentralized finance and nonfungible token sectors — to its smart contracts ecosystem.

Overbought risks

But Cardano’s technical indicators predict a short-term shock, something that might have the ADA/USD corrected lower by as much as 40% despite maintaining its long-term bullish outlook.

The Cardano token’s daily relative strength index (RSI) has ventured deeper into overbought territory, at around 83. Traders consider an RSI reading above 70 as overvalued. As a result, it prompts them to sell the asset to secure maximum profits.

ADA/USD daily chart featuring RSI correction fractal. Source: TradingView

For instance, a run-up in ADA/USD rates in the first quarter of 2021 pushed its RSI reading above 90. Later, the pair started consolidating sideways while maintaining support near its 50-day exponential moving average (50-day EMA; the scarlet wave).

Related: Cardano defies Peter Brandt’s 90% crash warning, ADA price doubles to new high

ADA’s price now sits atop 114% month-to-date and 1,511% year-to-date profits. At the same time, an oversold RSI pictures an interim profit-taking scenario. So if the Q1/2021 fractal repeats, ADA’s next line of support comes to be near its 50-day EMA at $1.73, almost 40% below the current prices of $2.83. 

But a correction won’t necessarily exhaust Cardano’s long-term bullish outlook. Given the potential success of its Alonzo upgrade, the project could end up attracting more speculative upside bids for its ADA token. As a result, the ADA/USD exchange rate expects to remain in price discovery mode.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Every investment and trading move involves risk, you should conduct your own research when making a decision.