Cardano has broken below a key support. The next relevant area of support is 2430 satoshi. This will be a key test. If this support fails, a drop to as low as 2125 satoshi is very likely.
Assuming the 2430 support fails, that would signify a wave failure. This would put Cardano in a WXY pattern that may play out like this:
My prior bullish count is NOT yet invalidated. If the 2430 support holds, we may be looking at a bullish double bottom. Remember...wave 1 doesn't fail unless it drops below the start of wave 1. Right now, Cardano looks to be making the perfect "W" pattern commonly seen with a double bottom. This is NOT my primary count. However, until ADA drops below the 2430 support, it is still a possibility and may look something like this:
The 4 hour and 1 day RSI are operating within a wedge. Both are in bearish territory. As they move closer to the wedge's apex, we can expect a more impulsive move up or down.
Obviously the entire market has taken a more bearish turn. All eyes are on bitcoin. If it drops, Cardano will drop with it. If bitcoin rises, so will Cardano, but at a greater rate in my opinion.
A break below the 2430 support may be a good time to enter a short, with a target of 2150-2125. To enter a long position, I'd wait until Cardano breaks above the descending resistance line on the 4 hour and 1 day RSI. If/when that happens, AND if the 2430 support holds, a swing trade targeting 3050 satoshi may be something to consider. If not, Cardano will become an attractive buy at around 2150. As always, make sure you're managing risk and never trading on emotion.
Let's see how the next 24 hours unfold.
Short Term: Neutral-Bearish
I hope this has been helpful. I’d be happy to answer any questions in the comment section below. Thanks for stopping by.
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