Disclaimer: The results of the following analysis are the sole opinions of the author and should not be construed as investment advice
For the past few days, ADA has battled some bearish divergences and an overbought RSI to resume its northward run. At the time of going to press, the price was 21% above its all-time high in May. In addition, the indicators suggested that there was more headroom for growth before the next correction.
At the time of writing, ADA was trading at $ 2.85 with a market cap of $ 84.24 billion.
Cardano 4 hour chart
The development of ADA on the 4-hour chart was a little clearer than on the daily chart, which was almost a 90-degree hike. On the lower timeframe, ADA has risen steadily since early August while maintaining its higher highs and higher lows. Resting spots formed at $ 1.88, $ 2.38, and $ 2.80, levels that allowed ADA to stabilize before shooting north.
Following that trend, ADA’s recent consolidation of $ 2.8 has paved the way for another price spike and the $ 3 mark looked like a security. Some goals were the 161.8% and 200% extensions. The biggest question, however, was this – does ADA have the legs to continue its $ 3 rise?
Short answer – it is very likely.
Although the Relative Strength Index was close to overbought levels, an ascending triangle formation offered opportunities for another uptrend above $ 3. In addition, the Awesome Oscillator made a higher peak, suggesting that the number of buyers in various price ranges was actually increasing. Such a development has also been seen in the MACD, but a declining crossover carries some short-term risks.
To initiate drawdowns, sellers would have to aim for a closing price below $ 2.70 and the 20-SMA (red). On the contrary, a low below USD 2.37 would be even more ominous. Of course, this would also lead to failures in the indicators mentioned.
While ADA has its eye on the $ 3 mark, the spotlight is on the 161.8% and 200% Fibonacci expansion levels moving forward. If sellers trigger retracements, the price must hold a position above $ 2.37 to maintain ADA’s bullish thesis.