Disclaimer: The results of the following analysis are the sole opinions of the author and should not be construed as investment advice
After its third attempt in over a week, Cardano eventually closed above the $ 2.96 cap, forming a new ATH above $ 3. Some additional targets were drawn with the Fibonacci extension tool while the focus was on some lines of support in the event of a retracement.
At the time of writing, Cardano was valued at $ 3.05 and had a market cap of $ 98.2 billion.
Cardano daily chart
ADA hasn’t disappointed on the charts since the price rose from a monthly low of $ 1 in late July. Since then, ADA’s value has risen by a staggering 205% – the highest percentage of earnings among the top 10 coins by market cap. Buyers have kept ADA on track by hitting consistently higher lows for over a month. Because of this, ADA was supported to eventually close above its ascending triangle and the $ 3 price level.
The Fibonacci extension tool was drawn on ADA’s impulsive retracement from $ 2.96 to $ 2.47 that happened last week. This identified important target areas at the 50% and 61.8% Fibonacci levels. The latter Fib level was given more emphasis as it appeared to be a viable take profit from ADA’s bullish pattern.
If sellers drive price south, the first line of defense would be in the newly flipped $ 2.96 zone. In the event of a larger sell-off, the support lines at $ 2.70 and $ 2.46 would ease selling pressure.
The MACD has accurately mapped the ADA’s most recent trajectory. Bearish momentum has gradually declined over the past few days and the same has turned into a bullish crossover. The on balance volume also picked up on the rise in buying pressure and traded at multi-month highs. Such highs were last seen when ADA traded at $ 2.46 in mid-May, just before the wider crypto sell-off.
Meanwhile, the RSI has risen above the overbought area and could trigger a short-term market decline. However, a close above the 38.2% Fibonacci level would likely push the RSI deeper into the upper zone.
After ADA closed above $ 2.96, traders can keep an eye on some key price levels. Over the next week, the 61.8% Fibonacci Extension Level would be the closest point of contact for traders to exit their positions.
Meanwhile, due to the overbought nature of the RSI, the market is also vulnerable to an immediate drop to $ 2.96.