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Cardano is showing early signs that it wants to recover despite the precarious market conditions. Still, traders would have to wait for a decisive close above resistance because the technicals present ambiguity.
Cardano Consolidation
Cardano remains stagnant while momentum builds up for a significant price movement.
Cardano went through a 45% correction following Terra’s death spiral. It saw its price drop from a high of $0.70 to a low of $0.38 on May 12. Its ADA token has been consolidating since then within a tight price range that is becoming narrower over time.
Such erratic price action appears to have led to the formation of a symmetrical triangle on Cardano’s four-hour chart. As ADA approaches the pattern’s apex, it builds momentum for a significant spike in volatility. A sustained close above the $0.58 resistance level or below the $0.49 support level could result in a 45% price swing in that direction.
Despite Cardano’s ambiguous outlook, the odds appear to favor the bulls. The Tom DeMark (TD) Sequential indicator presented a buy signal in the form of a red nine candlestick within the same time frame. The bullish formation anticipates a one to four candlesticks upswing, which could help ADA overcome the $0.58 resistance level.
Breaching such a critical supply barrier could encourage sidelined investors to reenter the market and push Cardano toward $0.82.
Still, it is imperative to wait for a sustained close above resistance or below support due to the current market conditions. The lack of trading volume and uncertainty among investors paint a negative picture for the cryptocurrency industry.
Disclosure: At the time of writing, the author of this piece owned BTC and ETH.