As a seasoned crypto investor with over a decade of experience navigating market fluctuations and trends, I must say that the recent surge of Cardano (ADA) has been quite intriguing. The 140% increase in November, primarily driven by Donald Trump’s reelection, is indeed impressive. However, my gut feeling tells me that we might be in for a correction, at least in the short term.
The value of Cardano (ADA) has risen by a substantial 140% during November, largely attributed to Donald Trump’s victory in the U.S. presidential election.
Yet, certain indicators hint that a significant chunk of the ADA advancements sparked by Trump might decrease over the next few days.
ADA signals 35% correction on weaker technicals
The current price trend of Cardano’s ADA token suggests a possible decrease might be imminent, as a bearish “ascending triangle” pattern seems to be emerging in its 4-hour chart.
In simpler terms, when multiple lines that typically rise meet, it could indicate an upcoming change in direction, possibly moving towards a downturn.
Should the ADA price drop below the lower trendline of the wedge, the potential decline might extend to the maximum width of the wedge’s span.
In the upcoming short term, this analysis suggests a likely price point around $0.598. However, in a very pessimistic outlook for November to December, it might dip down to approximately $0.513.
Remarkably, the potential drop to around $0.513, which represents a decrease of roughly 35% compared to the current prices, seems to coincide with the 200-4H Exponential Moving Average (EMA), symbolized by the blue wave in the chart.
During ADA’s recent price increase, trading volume has been decreasing, which could indicate that the rally may be losing strength. Lower trading volumes make bearish patterns such as the rising wedge more dependable.
Additionally, the graph for Cardano exhibits an increasing discrepancy between price increases and decreasing Relative Strength Index (RSI), suggesting bearish divergence. This pattern hints at a declining bullish momentum.
In simpler terms, the Relative Strength Index (RSI) currently stands at 68, just shy of the 70 mark that indicates the asset (ADA) could be getting too expensive. This suggests that ADA might be approaching an overvalued stage, which potentially means a decrease in its price may follow.
Cardano’s weekly chart supports sell-off scenario
Breaking significantly above the upper boundary of the wedge shape, preferably with increased trading activity, might challenge or even contradict the current pessimistic forecast.
Making this move could potentially trigger a test of the ADA’s weekly chart’s 0.236 Fibonacci retracement trendline, which coincides with the $0.90 resistance level.
Looking at the fractal pattern, it appears that the value of 0.90 has functioned as a significant support level since the month of April 2022.
In March 2024 and April 2022, ADA experienced a significant decline of approximately 65-75%, which suggests that a comparable price adjustment could occur during November-December as well.
If Cardano experiences a decline, its potential support level on the weekly chart seems to be its previous resistance trendline that has now shifted into support, which coincides with its 200-week Exponential Moving Average (represented by the blue wave), approximately at $0.476. This represents a drop of around 40% from current prices.
As a crypto investor, I’m observing that Cardano’s (ADA) Relative Strength Index (RSI), currently sitting at a level seven points above the overbought mark of 70, seems to be pointing towards a potential long-term correction in its price trajectory.
On the brighter side, Cardano’s fundamentals have improved due to Trump’s reelection.
2025 could see increased interest in cryptocurrencies such as ADA, given that his administration plans to adopt a light touch when it comes to regulating digital currencies.
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2024-11-20 14:24