Cardano (ADA) â Worth Watching đ§
After months of a downtrend, ADA seems to have found a bottom. Finally, slightly above the $0.30 level.
Moreover, ADA printed a higher low on the daily timeframe, signaling buyers are stepping in at this level.
However, it's definitely not time to rush into a trade yet.
In this post, I will explain everything you need to know to set up a proper trade. So, let's dive in!
1ïžâŁ Key Resistances to Watch
Let's start with the most important: ADA is approaching three critical resistances converging in the same region.
⣠EMA 200: ADA has been trading below the 200 EMA for months, with multiple failed attempts to break through.
⣠Upper Trendline of the Descending Channel: This trendline has been ADA's primary resistance during its downtrend. Breaking out of this channel could trigger a significant move.
⣠Recent High: ADAâs previous high aligns closely with these levels.
2ïžâŁ Trade Setup
If ADA can break above these three key levels, it could spark a massive rally. But until that happens, itâs too early to enter.
⣠Entry: Wait for a break and close above $0.42. This level will confirm the breakout from the EMA, the descending channel trendline, and the previous high.
⣠Target 1: $0.50 â First logical resistance after the breakout. Offers a potential ~20% gain.
⣠Target 2: Slightly below $0.60 â Stronger resistance and a potential 40% gain from the $0.42 entry.
⣠Stop Loss: To manage downside risk, a safe stop could be placed below $0.38, just under the recent higher low.
3ïžâŁ Volume Insight
The volume will be crucial in confirming any breakout. If ADA can push through these resistances with a significant increase in volume, it could trigger a longer-term trend reversal. However, without volume support, the chances of a false breakout increase.
In summary, the technical setup is compelling, but patience is key. Wait for a confirmed breakout before entering. If ADA can push through $0.42, it could signal the start of a strong rally.