Technical Analysis and Market Entry: ADA/USDT Eyes Near-Term Recovery
- Cardano’s ADA sold off for four consecutive weeks, dropping over 75% during this period.
- ADA/USDT has staged a near-term rebound, however, may prove to be limited.
ADA/USDT: Recent Price Behaviour
Cardano’s ADA has managed to stabilize and regather some upside momentum, following the harsh run of losses seen recently. The price had been falling consecutively for some four weeks, dropping from $0.073000 down to lows produced at $0.017500. It was a chunky drop of 75%, the worst run of losses since 2017.
The commence of the downward trend had come into play, following an evening star being produced, via the weekly chart view. Buyers lost upside momentum after a dominating performance from the getgo of 2020. It had rallied from $0.030000, gaining 135%; it rose to the highest levels since July 2019.
Think Tank Takes Legal Action against the Cardano Foundation
It has been reported that Z/Yen, a London based think tank, has initiated legal proceedings against Cardano. The dispute revolves around a reported agreement between the two organizations that the foundation allegedly terminated or voided for reasons not disclosed in the blog post.
The proceedings relate to an alleged agreement between the Z/Yen Group Limited and the Cardano Foundation dated July 2017. The Cardano Foundation voided/terminated the agreement for various reasons. The Cardano Foundation fully rejects the claims raised by the Z/Yen Group Limited. Due to the ongoing nature of this judiciary process, no further information will be given while proceedings are in progress.
Daily Chart View
ADA/USDT following the massive bearish beating encountered, managed to caught safety around the $0.025000 price area. The narrowing was then observed for some six sessions, forming a bearish pennant structure. There was room for the sellers to capitalize on the pattern. However, a breakout from the bulls voided this setup.
Given the noted failed pennant, a small further near-term recovery is being eyed; however, this could prove to be limited. There is a substantial barrier which runs from $0.030000 up to $0.033000, a former acting demand zone, before being breached. It is also worth noting, via the weekly chart view, that last week’s bearish candle formed a huge wick to the downside.
Technically, this is still vulnerable to being filled, with the lower part of that down at the $0.018000 mark. A rejection and entry for a final drop are still eyed from around $0.034000. The target would be for the above-noted $0.018000. Stops to be placed at $0.036000. Should the bulls force a breakout and daily closure above, then a more profound recovery would be likely.
Disclaimer: The author owns Bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.
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