ADA Imminent Bounce off Channel Support/50 day Moving Average
ADA's been trending horizontal for a while now, which corresponds to traversing the parallel channel (on a log graph, so it's exponential) that we've been in since late November. The first (successful) challenge at the longtime ATH of 1.40 USDT on the 27th and 28th of Feb was the last time we were at the top of the channel, and arguably we should have hit the bottom of the channel already, if it weren't for the spike caused by the launch of ADA on Coinbase.
Within the last 24 hours we've already had two bounces off the bottom of the channel (at around 1.040 USDT), and this to me indicates a possibility of a solid reversal and possible imminent bullish run. Additionally, the channel's support trendline currently exactly coincides with the 50 day moving average, which adds additional support. The last time we had this was 24/12/2020, which preceded a strong run.
Furthermore, a quick look at the RSI on the daily timescale shows that we're somewhere around 47, which we can see, from the horizontal line on the RSI chart, is within five points of the previous challenges and subsequent bounce off the bottom of the channel. Market conditions are remarkably similar to the days just before Christmas.
The one thing that might cause a breakdown of the channel would be a sustained correction to the 20W MA by Bitcoin, which is not out of the question. Still, Bitcoin remains above its 50D MA (currently challenging it), which it's been above since October. I'm not saying that sustained selling pressure can't push it below the 50D MA, which would almost certainly precipitate a correction for ADA as well (and a breakdown of the channel), but we'd much rather be above the 50D MA than below it, and I think given how long since we've been below it we would expect decent support to be had there.
The other thing to consider is the Cardano 360 update at 25/03/21 17:30 UTC. There's reason to believe good news about the Goguen rollout will be announced (due to a Tweet by Charles Hoskinson - make of that what you will), and it's very possible that a positive announcement would kickstart and catalyse a bullish run by ADA.
If ADA does exactly what it did around Christmas 2020 then we'll see a 175% run over the course of 14 days. I'm not sure we'll see that, maybe we'll ride the channel support for a week or two, maybe we meet resistance at the 20D MA, bounce back down, then go up, or maybe the Cardano 360 March update lays out a concrete roadmap for Alonso and we go into absolute overdrive. Still, I'm pretty confident that 1.05-1.10 USDT is the lowest price we'll see in quite a while, and it's a great price to buy at IMO.
Within the last 24 hours we've already had two bounces off the bottom of the channel (at around 1.040 USDT), and this to me indicates a possibility of a solid reversal and possible imminent bullish run. Additionally, the channel's support trendline currently exactly coincides with the 50 day moving average, which adds additional support. The last time we had this was 24/12/2020, which preceded a strong run.
Furthermore, a quick look at the RSI on the daily timescale shows that we're somewhere around 47, which we can see, from the horizontal line on the RSI chart, is within five points of the previous challenges and subsequent bounce off the bottom of the channel. Market conditions are remarkably similar to the days just before Christmas.
The one thing that might cause a breakdown of the channel would be a sustained correction to the 20W MA by Bitcoin, which is not out of the question. Still, Bitcoin remains above its 50D MA (currently challenging it), which it's been above since October. I'm not saying that sustained selling pressure can't push it below the 50D MA, which would almost certainly precipitate a correction for ADA as well (and a breakdown of the channel), but we'd much rather be above the 50D MA than below it, and I think given how long since we've been below it we would expect decent support to be had there.
The other thing to consider is the Cardano 360 update at 25/03/21 17:30 UTC. There's reason to believe good news about the Goguen rollout will be announced (due to a Tweet by Charles Hoskinson - make of that what you will), and it's very possible that a positive announcement would kickstart and catalyse a bullish run by ADA.
If ADA does exactly what it did around Christmas 2020 then we'll see a 175% run over the course of 14 days. I'm not sure we'll see that, maybe we'll ride the channel support for a week or two, maybe we meet resistance at the 20D MA, bounce back down, then go up, or maybe the Cardano 360 March update lays out a concrete roadmap for Alonso and we go into absolute overdrive. Still, I'm pretty confident that 1.05-1.10 USDT is the lowest price we'll see in quite a while, and it's a great price to buy at IMO.
Comment:
Well, bit of an update! ADA indeed met resistance at the 20D MA, and is now caught in the envelope between the 20D and the channel support. We might stay in this region until the price is forced out by the intersection, which we could extrapolate to be around the 29th of March. In that situation though, I think the channel support is much stronger than the resistance provided by the 20D MA, and the price would go up.
Comment:
In the meantime, Bitcoin has bounced off its 50D MA after challenging it for 5-6 hours. Of course this doesn't mean it can't continue to challenge it repeatedly over the next few days if selling pressure continues to pile on.
Keep your eye on this space and monitor it keenly.
Keep your eye on this space and monitor it keenly.