fxstreet.com
- Cardano price action closed Sunday’s candlestick at a 10-month low, retreating to March 16, 2021 levels.
- The $1.00 value area remains under threat.
- Bears may attempt to push Cardano over the edge and into sub-$1.00 levels.
Cardano price has stubbornly held onto the $1.00 value area as its primary support. ADA has tested the $1.00 level eight out of the past ten trading days.
Cardano price may be ready for its bullish break above $1.00
Cardano price is positioned for a significant bullish breakout if it can achieve a daily close above the Tenkan-Sen at $1.08. ADA has spent the past twelve consecutive days with daily candlestick closes below the Tenkan-Sen. This prolonged constriction against the critical 50% Fibonacci retracement at $1.00 has generated substantial accumulation, which now looks poised to begin another leg up.
Bulls should have a reasonably easy time moving Cardano towards the $1.30 zone. $1.30 contains the 38.2% Fibonacci retracement, the bottom of the Cloud (Senkou Span A), the Kijun-Sen, and the 2022 Volume Point of Control. The oscillators support a breakout to that price range.
The Relative Strength Index remains in bull market conditions and tests the final oversold level at 40. The Relative Strength Index has been at the 40 level for 10 days, without any clear sign of a move lower. Additionally, the Composite Index has crossed above both of its moving averages, generating a bullish signal and lending strength to any breakout higher on the candlestick chart.
ADA/USD Daily Ichimoku Kinko Hyo Chart
However, downside risks remain. Consolidation after a trending move is often a pause before continuing the prior trend – which was bearish. If the Relative Strength Index moves lower and hits 30, the RSI converts into a bear market setup. In that scenario, the Composite Index will have crossed back below its moving averages, triggering very bearish sentiment. Finally, the Optex Bands would likely begin the move out of neutral and into oversold. A retest of the 2022 lows near $0.91 for Cardano price would be likely.