Cardano (ADA) Price Analysis: Resistance Turned Support at Double Bottom Neckline
Cardano previously formed a double bottom reversal pattern and rallied past the neckline to confirm that an uptrend is in order. Price found resistance around 0.095, though, and has dropped back to the broken neckline to gather more bullish energy.
Support at the former resistance appears to have held, especially since it lined up with the 200 SMA dynamic inflection point. The 100 SMA is above this longer-term 200 SMA to confirm that the path of least resistance is to the upside. In other words, the uptrend is more likely to resume than to reverse.
Applying the Fibonacci extension tool on the latest correction shows the next potential upside targets. The 38.2% extension is closest at 0.087 then the 61.8% level lines up with the swing high. Stronger bullish pressure could take it up to the 78.6% extension past 0.100 or the full extension.
Stochastic is still heading up to signal that buyers are in control of price action and could keep Cardano afloat. However, this oscillator is nearing overbought levels to reflect exhaustion. Turning back down could lead to another dip.
Meanwhile, RSI is also on the move up to reflect the presence of bullish momentum. This oscillator has some room to climb before hitting overbought levels, so there could be a few more gains in the cards before buyers take a break.
Cryptocurrencies appear to be getting back on their feet after a couple of positive industry updates. First is that the SEC has opened the comment period for the proposed rule change to list bitcoin ETFs from VanEck and SolidX. Next is that Google has lifted its ban on bitcoin ads, following a similar move by Facebook.
This could revive general interest in the cryptocurrency scene, as well as increased trading activity and volumes. However, the tech company will only allow ads from regulated crypto companies in the US and Japan.