We’re taking a quick look at the crypto market today as a few of the top-tier tokens are seeing volatility right at the start of the week.
Will the pick-up in price action draw in traders to these technical setups on ADA and SOL?
In late August, Pipcrawler took a look at ADA/USD after a massive run-up from $1.50 to $3.00 in less than a month. While overall bullish on the fundamentals, he called for a potential short-term top formation and pullback scenario to play out, which is what we got last week.
The addition of smart contracts allows the Cardano blockchain to join the DeFi boom, keeping the fundamental story more bullish than bearish at the moment.
And with ADA/USD finding strong support around the $2.20 – $2.35 area, the odds are pretty solid this area could attract buyers looking to front-run what could be an explosive expansion in the Cardano ecosystem, at least in the short-to-medium term.
Last week, I was on the daily chart of SOL/USD, in awe of the parabolic move from around $40 in early August to just under $200 in early September. But the bitcoin flash crash happened and took the pair down to as low as $131 on the session, before stabilizing around the $170 handle.
With strong fundamentals behind the rally, I thought this was a buying opportunity dip, with a potential for the pair to get as low as the previous swing ‘highs’ as possibly buying target prices (around $130 – $140 area).
After that post, it looks like Solana bulls took that dip as a buying opportunity, pushing the market up to new all-time highs around $216 on Thursday before topping out.
And since then, the market has steadily pulled back, possibly on profit-taking, to retest the 38% Fibonacci retracement area. Is it time for buyers to jump back into the uptrend?
The stochastic indicator is suggesting that the pullback is overdone, but with a potential big-time macroeconomic catalyst right around the corner in the form of global inflation updates, we’ll sit in watch mode on SOL/USD.
High inflation data could spark central bank tapering/rate hike speculation, which means a potential short-term bullish run for the Greenback and selling pressure on risk assets like crypto. If that scenario doesn’t play out, we’ll be on the lookout for bullish reversal patterns around the Fibs for a potential long position.
What do you all think? Are ADA/USD and SOL/USD buy candidates on these dips? Or is the bull run over for now? Let me know in the comments section below!