– Cardano price sets up a bullish divergence setup on the daily chart.
– The resolution of this formation could result in a 25% ascent to $0.306.
– Invalidation of the bullish thesis will occur if ADA produces a lower low below $0.231.
Cardano price has been on a
downtrend for more than two months, showing seller domination.But the recent development gives hope for sidelined buyers as a quick uptrend might emerge.
Also read:
Cardano price plummets despite rise in development activity and transaction volume, why?
Cardano price ready to move higher
Cardano price set up a range, extending from $0.380 to $0.231 as it shed 39% between July 14 and August 17.Currently, ADA trades at $0.245 and has produced three distinctive lower lows in the last month.But, the Relative Strength Index (RSI) and Awesome Oscillator (AO) have produced higher lows.This non-conformity is termed bullish divergence and often results in the underlying asset rallying explosively.
The result of this explosive breakout could lead Cardano price to rally 18% and tag the $0.289 hurdle.In some cases, ADA could tag the midpoint of the aforementioned range at $0.306, bringing the total gain to 25%.
A highly bullish case coupled with patient ADA holders could see Cardano price revisit the 200-day Exponential Moving Average (EMA) at $0.314.This move would constitute 28% gain.
ADA/USDT 1-day chart
While the bullish
outlook for Cardano price makes logical sense, a continuation of the downtrend would hamper the bullish divergence.
A decisive breakdown of the range low at $0.231 that results in the production of a lower low would invalidate the bullish thesis.
Such a development could see Cardano price could drop 7% and revisit the June 10 swing low at $0.214.
Read more:
Altcoin capitulation incomplete as small percent of Cardano, Polygon and Shiba Inu holders are profitable
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