Cardano (ADA) bulls just held a major support area once again!
Will this translate to a bullish reversal for the controversial crypto asset?
Here’s a chart that I’m looking at:
Cardano (ADA) has been sliding since September, after hitting all-time highs above the $3 handle on the release of smart contract capabilities.
It’s likely many holders have gotten impatient as there has yet to be a major application release since then, but with the impending release of Cardano’s first decentralized exchange (DEX) called SundaeSwap, is the price action about to change?
We’ll have to wait-and-see what happens when SundaeSwap goes live, but so far, just the impending release was enough to pump ADA/USD higher this past week, a very interest move given that it occurred at the very strong area of interest.
On the daily chart above, we can see that the late 2021 slide took ADA/USD all the way down to the $1.20 area (with a low of $1.07), which has been a major area of support for ADA/USD in the first half of 2021. It’s here that we can argue a double bottom pattern has formed, which may be the technical draw for the recent move to the previous swing high of $1.50.
This question now is whether this is a true bullish reversal in the making, and if we do see a flood of capital and activity form on SundaeSwap, that could draw in further fundamental buyers.
And if we do see that falling trendline pattern and previous swing high break, technical traders may get bullish as well, making a sustained move above $1.50 a potential high probability setup for Cardano bulls to keep watch of for a longer-term position with great potential reward-to-risk.
Of course, the broad crypto market is seeing lots of red at the moment, and if that’s enough to drag ADA/USD lower as well, then this trenline retest may be a short-term opportunity to be aware of to grab some gains if negative risk sentiment rises and the U.S. dollar strengthens this week.
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