Altcoins are trying to recoup losses and hold on to their positions as investors assess the current state of the market. Cardano’s ADA, currently ranked 10th, is down 2% in the last 24 hours and 3% in the last seven days.
Analyst Crypto Capital Venture discussed a consistent pattern in Cardano (ADA) price action, focusing on the 20-week moving average. Historically, whenever ADA enters the oversold territory of the stock RSI (a momentum indicator), it eventually moves higher.
This pattern has occurred about ten times, signaling larger price moves each time. ADA is currently back in the oversold territory. If history repeats itself, it could soon test the 20WMA at around $0.52. A break above this level could signal the start of a new upcycle for ADA, similar to previous cycles.
Short-term price analysis:
On the daily chart, there is a potential bullish divergence on the RSI (Relative Strength Index), a momentum oscillator, suggesting that momentum may be fading despite the price decline, indicating a possible recovery.
He compared the current price action to previous patterns and noted similarities. He suggested that we could see a similar structure and bottom soon. However, there could still be some sideways or downward movement before a significant upside move occurs.
Critical resistance range:
For a bullish scenario, ADA needs to break above the key moving averages: the 20-day average around $0.41 and the 50-day average around $0.44. The crucial area to watch is between $0.45 and $0.48 for bullish confirmation. On the weekly chart, ADA needs to rise above $0.53 to indicate a strong bull market.
There may still be some downward or sideways movement before a clear uptrend emerges. If ADA can break through the key levels mentioned and hold support there, it could signal the start of a clear uptrend.
