After surging to $0.65 on December 9, Cardano experienced an 18% decline, settling at $0.52 on December 11. A subsequent attempt to extend the upward momentum saw the price briefly touch $0.68, but it encountered resistance.
On December 14, it went down by about 9%. At the time of writing (December 15 2023) Cardano was trading at around $0.62. Its recent upward movement has resulted in a cumulative gain of nearly 180% since the middle of October. Does this current price movement indicate a shift in sentiment?
On October 19, when the price of Cardano traded at around $0.24, a new uptrend began. At first, it climbed to a resistance $0.40 and broke out of the horizontal range it had been trading in since the start of 2023.
This signaled the start of a bull phase for ADA, which was hinted at before with a breakout from the descending resistance anchored on its April 14 high. The price increased in a five-wave pattern to to reach its May 2022 levels but could now be going back down.
The daily chart’s Relative Strength Index (RSI) indicates that Cardano was overbought, reaching nearly 90% on December 10. This point looks like the end of this uptrend, meaning a reversal looks highly likely.
A larger correction that could establish a higher low and demonstrating that it has moved on.
Looking closely at the hourly ADA chart, we can see that there could be just one upward movement before this reversal starts. If that happens, it should only a minor one approaching the $0.70 mark on its fifth wave.
Measuring the range of the larger uptrend and looking at the potential targets for the expected reversal, we can see that its typical 0.618 Fibonacci level perfectly matches the significant resistance of $0.40.
This is why its retest would be a logical progression. The coin has started a multi-year bull cycle.
Please note that the contents of this article are not financial or investing advice. The information provided in this article is the author’s opinion only and should not be considered as offering trading or investing recommendations. We do not make any warranties about the completeness, reliability and accuracy of this information. The cryptocurrency market suffers from high volatility and occasional arbitrary movements. Any investor, trader, or regular crypto users should research multiple viewpoints and be familiar with all local regulations before committing to an investment.