Cardano, the tenth largest cryptocurrency on CoinMarketCap had a decent rally over the past few days. The price of the cryptocurrency surged by 133% since December 16, 2018. However, the rally seems to be coming to an end as price candles have formed at the end of the ascending channel/rising channel.
Will the rally continue? Will the rally hit a roadblock and bounce back? If so, what are the levels to look for?
The one-day chart of Cardano showed the formation of a rising or ascending channel. This is a bullish pattern, provided a few conditions are met. These conditions include rising volume and divergence between price and other indicators, like RSI.
However, the current channel shows a higher probability of the price breaking to the downside due to two reasons.
- The volume is declining after reaching a peak on March 23, 2019
- There is a resistance [$0.06925] at the end of the channel
These two reasons are further corroborated by the Relative Strength Index, which was in the oversold zone. This indicated that the price has exhausted its buying momentum and has nowhere left to go, but downside.
Fibonacci Retracement Confirmation
After the previous surge in price took place between December 16, 2018, and January 10, 2019, the prices corrected from $0.05245 to a support at $0.03617, which also happened to be closest to the 61.8% Fibonacci level.
The Fibonacci Retracement for ADA in the current ascending channel shows a possible retracement to 61.8%, which also happens to be a support level at $0.04962.
Cardano seems to have exhausted its bullish momentum as it rallied one last time. The volume of Cardano showed a possible move to the downside. The following levels could be a possible correction for ADA if it broke to the downside, i,e $0.04962. Other supports for ADA are at $0.04523, $0.03617, and $0.02720.
The Cardano Ecosystem
There were quite a few updates, ranging from managerial restructuring to exchange announcements in March 2019, all of which could be speculated to have caused a surge in price. The most recent one was the integration of Cardano [ADA] with the cryptocurrency hardware wallet Ledger.
Additionally, Cardano became a founding member of the International Association for Trusted Blockchain Application [INATBA].
Other major updates in the Cardano ecosystem include the launch of the 1.5 main net. The release was part of the concluding stages of the Byron phase of development, including an improved proof-of-stake protocol. This development would ensure better block storage, the inclusion of the Daedalus wallet for Linux, the Cardano testnet, and an increase of Rust tools and other features within the coin’s ecosystem.
— Weiss Ratings (@WeissRatings) March 25, 2019
Further, the Shelley update, which is yet to hit Cardano is much-awaited and a lot of users and ADA enthusiasts believe that it will help Cardano become more decentralized.
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Akash is your usual Mechie with an unusual interest in cryptos and day trading, ergo, a full-time journalist at AMBCrypto. Holds XRP due to peer pressure but otherwise found day trading with what little capital that he owns.