Cardano has been on the rise for some time now and is also a trending topic on social media when looking at crypto. So we thought it was time to take a look at the charts again. Looking at the weekly chart, there is a significant inefficiency block at the level of the old ATH at 0.38850.
The ema's are bullish but far from the price. Often this indicates a temporary pullback. So although a top has not yet been formed to draw a fibonacci we are already anticipating and have done so. Normally you want to see at least 2 but preferably 3 candle closes after the top formation. Should this be the top then the golden pocket falls into the inefficiency block. The rsi has also dipped below the ema but is still in bullish territory.
Weekly Chart: https://www.tradingview.com/x/5BLnJ3cL/
On the daily we see a double bear div on the rsi. The rsi is also falling harder along with the ema and almost reaching the 50 level. Looking at the ema's we see a bullish trend where the strength is declining. All in all quite a few signals that could indicate the filling of the inefficiency block and also the golden pocket retrace.
Daily chart: https://www.tradingview.com/x/9gso8ngp/
Here the price is hanging on the demand zone and setting lower highs. There is still a higher low on the chart, but I doubt it will last long. The ema's are already starting to weaken and are pushing the price down considerably. Also the rsi has fallen below the ema and the 50 level. All in all also quite a few confirmations of what w eal saw on the higher timeframes.
4h chart: https://www.tradingview.com/x/QnlZ4fbg/
Conclusion:
I give the biggest chance to the bears this time but look at both scenarios. If the price breaks the 1.22 I am willing to cautiously look upwards again. But as the analysis probably suggested, I think it will be a retrace before ADA can continue its way up again.
In order to decline, the demand zone on the downside needs to be broken. When this happens there will be support on the 4h chart at 81 cents and then at 65 cents. The latter is also the top of the inefficiency block which continues all the way up to 40 cents.
