ADA has currently completed 5 subwaves of the third wave. The RSI is displaying bearish divergence, where the price goes higher, but the RSI does not. This could indicate that ADA is losing strength even though the price is increasing. This is further supported by the declining volume and rising wedge pattern, which show that the amount of buyers are decreasing. Possible shorts could target the 0.382 fib regions.
A drop in price in wave 4 can also provide an opportunity to load up on longs for the fifth wave. The 0.682 to 0.5 fib region is strong support as it is just above the previous high. Elliott Wave rules dictate that wave 4 cannot retrace past wave 1, except by a wick in leveraged markets.
On the bigger picture ADA is almost complete a larger scale fifth wave. Besides a fifth wave extension, which could very well happen if Bitcoin surges, ADA will soon make a larger correction after a short term rally, possibly dropping 20% from its local high.
A drop in price in wave 4 can also provide an opportunity to load up on longs for the fifth wave. The 0.682 to 0.5 fib region is strong support as it is just above the previous high. Elliott Wave rules dictate that wave 4 cannot retrace past wave 1, except by a wick in leveraged markets.
On the bigger picture ADA is almost complete a larger scale fifth wave. Besides a fifth wave extension, which could very well happen if Bitcoin surges, ADA will soon make a larger correction after a short term rally, possibly dropping 20% from its local high.
Trade closed: stop reached