Cardano’s ADA token saw a welcome dip, reaching our targeted range for long positions. The last 24 hours have been volatile, so in this video, Nick will delve into the technical analysis of ADA’s price action and explore potential future movements.

Key Points:

• ADA dropped to our target buy zone (around 0.3905 – 0.394 USD).
• Price faced resistance at the 50-day SMA (Simple Moving Average).
• We may see a further push upwards before a major move.
• Two possible scenarios for ADA’s price trajectory are presented.
• Trade setups are outlined based on the two scenarios.

Volatility and Potential Upswing

The chart shows ADA paired with USDT on the 1-hour Binance timeframe. Nick was anticipating a price drop to the 0.3805 – 0.394 USD range, which occurred yesterday at 09:00 UTC. The price encountered resistance at the 50-day SMA (yellow line).

Trade Setup Considerations

While there was a profitable long trade opportunity around 0.39 USD, it’s crucial to emphasize the importance of proper risk management. Always set stop-loss orders and avoid rushing into trades.

Two Possible Scenarios

• Scenario 1: Continued Uptrend
  • We might witness a three-wave correction up, followed by another three-wave correction down.
  • Support could be found around the 200-day EMA (blue line), forming a complete three-wave correction.
  • This would then lead to the next impulsive five-wave move to the upside.
  • The target price range in this scenario would be between 0.4216 and 0.4311.
• Scenario 2: Retest and Higher High
  • The price might not drop lower than the swing low of 0.392 USD.
  • This would imply a five-wave uptrend structure.
  • A retest of the 200-day EMA could lead to a higher final fifth wave.
  • The target price range in this scenario would be between 0.4233 and 0.4558.

Trade Setups (Based on Scenarios)

• Scenario 1:
  • Entry: Around 0.3988 (wait for confirmation breakout).
  • Stop-loss: Below the 200-day EMA or the swing low (around 0.3776).
  • Take-profit: 0.424 (within the target zone for both scenarios).
• Scenario 2 (Conservative):
  • Not ideal due to a lower risk-reward ratio.
  • Entry: Slightly above current price (around 0.398) with confirmation breakout.
  • Stop-loss: Below previous swing low (around 0.3776).
  • Take-profit: Within the target zone for both scenarios (around 0.424).

Disclaimer: This is not financial advice. Please conduct your own research before making any investment decisions.