Trend Analysis
The main view of this trade idea is on the 2-Hour Chart. The cryptocurrency Cardano (ADA) has been in a rangebound movement or rectangular pattern since late September 2021. Expectations are for the cryptocurrency to test the 2 support level and break down lower towards 1.60. Failure of this move would be observed if ADA were to rally above 2.35.
On the longer-termed Daily Chart ADA is in correction mode, trending lower. If it breaks below the 2 price level, it can go as low as 0.71, 67% lower from current levels. A negation of this move will be observed if ADA rallies above 2.35.
Technical Indicators
ADA is currently below its short (50-MA), medium (100-MA) and long (200-MA) fractal moving averages. There has been negative crossovers on the MAs, signaling a bearish trend. The RSI is below 50 and moving lower while the KST is in a sell mode. The key will be the break below the 2 price level to determine the leg lower.
Recommendation
The recommendation will be to go short at market, with a stop loss at 2.35 and a target of 1.60. This produces a risk/reward ratio of 2.31.
Disclaimer
The views expressed are mine and do not represent the views of my employers and business partners. Persons acting on these recommendations are doing so at their own risk. These recommendations are not a solicitation to buy or to sell but are for purely discussion purposes. At the time of publishing I have a short position on ADA.
The main view of this trade idea is on the 2-Hour Chart. The cryptocurrency Cardano (ADA) has been in a rangebound movement or rectangular pattern since late September 2021. Expectations are for the cryptocurrency to test the 2 support level and break down lower towards 1.60. Failure of this move would be observed if ADA were to rally above 2.35.
On the longer-termed Daily Chart ADA is in correction mode, trending lower. If it breaks below the 2 price level, it can go as low as 0.71, 67% lower from current levels. A negation of this move will be observed if ADA rallies above 2.35.
Technical Indicators
ADA is currently below its short (50-MA), medium (100-MA) and long (200-MA) fractal moving averages. There has been negative crossovers on the MAs, signaling a bearish trend. The RSI is below 50 and moving lower while the KST is in a sell mode. The key will be the break below the 2 price level to determine the leg lower.
Recommendation
The recommendation will be to go short at market, with a stop loss at 2.35 and a target of 1.60. This produces a risk/reward ratio of 2.31.
Disclaimer
The views expressed are mine and do not represent the views of my employers and business partners. Persons acting on these recommendations are doing so at their own risk. These recommendations are not a solicitation to buy or to sell but are for purely discussion purposes. At the time of publishing I have a short position on ADA.