As an update to yesterday's longer term analysis of ADA's price in hitting the channel support and 50D MA, I mentioned that we might see a situation where ADA doesn't go straight up, but rather is resisted by the 20D MA for some time.
This seems to be playing out. The price is currently in the envelope between the parallel channel support (and the 50D MA) and the 20D MA. It had already challenged the 20D earlier today, was rejected, and is now regrouping with some horizontal movement at low volume for a second attempt at breaching the 20D MA.
We can see that the price has challenged the 20D MA on two occasions even before it hit the channel floor, so we know there is buying pressure out there, we're just waiting for a strong move with higher volume to definitively break above it.
A simple linear extrapolation of the 20D MA shows that it is scheduled to intersect with the channel support trendline by early 29/03/21, so we can expect to see some definitive price movement before or at that cross - one of the two inhibitions on volatility must be broken. Anything short of a major Bitcoin capitulation would have me thinking that the channel support is stronger than the resistance of the 20D MA and so the price would move up and the channel remains valid. Still, this is crypto, Bitcoin is unpredictable, so stay on your toes.
Set your stop losses below the channel support trendline (depending on your risk tolerance), since a strong break below the support line would invalidate the channel we've been in since November and might cause a prolonged correction as far down as the 20W MA (currently at 0.501).
This seems to be playing out. The price is currently in the envelope between the parallel channel support (and the 50D MA) and the 20D MA. It had already challenged the 20D earlier today, was rejected, and is now regrouping with some horizontal movement at low volume for a second attempt at breaching the 20D MA.
We can see that the price has challenged the 20D MA on two occasions even before it hit the channel floor, so we know there is buying pressure out there, we're just waiting for a strong move with higher volume to definitively break above it.
A simple linear extrapolation of the 20D MA shows that it is scheduled to intersect with the channel support trendline by early 29/03/21, so we can expect to see some definitive price movement before or at that cross - one of the two inhibitions on volatility must be broken. Anything short of a major Bitcoin capitulation would have me thinking that the channel support is stronger than the resistance of the 20D MA and so the price would move up and the channel remains valid. Still, this is crypto, Bitcoin is unpredictable, so stay on your toes.
Set your stop losses below the channel support trendline (depending on your risk tolerance), since a strong break below the support line would invalidate the channel we've been in since November and might cause a prolonged correction as far down as the 20W MA (currently at 0.501).