Is it worth investing in Cardano?
The purple line shows changes in the total capitalization of the cryptocurrency industry. In other words, it is the index of the cryptocurrency market.
Back in 2019. At the beginning of the year, Cardano was strong. The increase from 3 cents to 9 cents showed stronger dynamics of ADA compared to the overall market. However, since the first of May and ending the first of July the market began to change. In those days, (formed a red circle) Cardano lost the role of leader. That range is indicated by red arrows. You can see that in this period there were very high trading volumes. And immediately after that period of the ADA fell under the purple broken line, showing that it has ceased to be the driver for the cryptocurrency industry. This can be interpreted as the area of distribution. That is the period when large investors get rid of the asset, arguing that it is overvalued.
The entire second half of 2019 Cardano was acting weaker than the market, slowly sinking to the levels about 3 the price per coin. Please note that the volume steadily dried up, due to the likely exhausting of the pressure of sellers.
Then came recovery. The coin rose in price on increasing volumes at the beginning of 2020. This is a positive dynamics, showing that levels of about 3-4 cents per coin are the fundamental area of support where weak supply gives way to strong demand.
However, in conditions of extreme volatility caused by the spread of the coronavirus, a coin fell below 3 cents and even reached 2 cents. Look at extremely high volumes (indicated by the first green arrow), this is the maximum volume on the chart and what is very important is a relatively narrow range (the difference between the low and high). This means that a large investor had absorbed the whole stream of sales due to short-term panic. This investor knew exactly what the level of 3 cents per coin is extremely attractive. Moreover, he likely possessed insider information about the upcoming good news. That is why we see a price recovery after the first green arrow, and the second green arrow indicates the release of positive news and the high profit that a large investor received in a short period.
What to do next, what are the prospects for the moment?
Cardano is trading near the resistance level, which is indicated by a thin red line. This resistance lasts for many months. It was tested in February 2020 and most likely that it will act as an obstacle to growth in the coming days, so the bullish momentum that developed from the lows of 2 cents per coin has a high chance of running out. Therefore, the pullback scenario is now more likely, and the opening of long positions on this coin will be more appropriate when receiving a signal that the pullback has ended.
The purple line shows changes in the total capitalization of the cryptocurrency industry. In other words, it is the index of the cryptocurrency market.
Back in 2019. At the beginning of the year, Cardano was strong. The increase from 3 cents to 9 cents showed stronger dynamics of ADA compared to the overall market. However, since the first of May and ending the first of July the market began to change. In those days, (formed a red circle) Cardano lost the role of leader. That range is indicated by red arrows. You can see that in this period there were very high trading volumes. And immediately after that period of the ADA fell under the purple broken line, showing that it has ceased to be the driver for the cryptocurrency industry. This can be interpreted as the area of distribution. That is the period when large investors get rid of the asset, arguing that it is overvalued.
The entire second half of 2019 Cardano was acting weaker than the market, slowly sinking to the levels about 3 the price per coin. Please note that the volume steadily dried up, due to the likely exhausting of the pressure of sellers.
Then came recovery. The coin rose in price on increasing volumes at the beginning of 2020. This is a positive dynamics, showing that levels of about 3-4 cents per coin are the fundamental area of support where weak supply gives way to strong demand.
However, in conditions of extreme volatility caused by the spread of the coronavirus, a coin fell below 3 cents and even reached 2 cents. Look at extremely high volumes (indicated by the first green arrow), this is the maximum volume on the chart and what is very important is a relatively narrow range (the difference between the low and high). This means that a large investor had absorbed the whole stream of sales due to short-term panic. This investor knew exactly what the level of 3 cents per coin is extremely attractive. Moreover, he likely possessed insider information about the upcoming good news. That is why we see a price recovery after the first green arrow, and the second green arrow indicates the release of positive news and the high profit that a large investor received in a short period.
What to do next, what are the prospects for the moment?
Cardano is trading near the resistance level, which is indicated by a thin red line. This resistance lasts for many months. It was tested in February 2020 and most likely that it will act as an obstacle to growth in the coming days, so the bullish momentum that developed from the lows of 2 cents per coin has a high chance of running out. Therefore, the pullback scenario is now more likely, and the opening of long positions on this coin will be more appropriate when receiving a signal that the pullback has ended.