Technical Analysis and Market Entry: ADA/USDT Seeing Critical Retest of Breached Bearish Flag

  • Cardano’s ADA has been on the run over the last five trading sessions, gaining some 28%.
  • ADA/USDT is undergoing a critical retest of a breached bearish flag structure, via the daily chart view.

ADA/USDT: Recent Price Behaviour

Cardano’s ADA is staging a decent rebound, after being under significant selling pressure during last week’s trading. ADA/USDT had dropped a chunky 25%, in its worst weekly performance seen since the week of 23 September. The price during that noted period had fallen some 28%. In terms of the latest drop, it is the lowest the price has been since the week of 17 December 2018.

ADA/USDT price action has been firmly within the control of the market bears; this has been observed since the latter stages of June. It followed the price rallying up to highs for 2019 at $0.10700, the highest since August 2018. Selling pressure had intensified after a critical ascending trend line was breached in July. It had been supporting the price during the bull run, seen through the first half of the year.

ADA/USDT daily chart

Bearish Flag Breach

Price action from 25 September up to 17 November had been consolidating, as a result forming a bearish flag structure. The generally sideways trading came following the steep fall between 19 – 24 September. ADA/USDT remains within a long downside trend when rallies are observed; they are seen as limited and sold by market bears. On 20 November the sellers breached the flag, inviting a fresh wave of pressure to the south.

Following the breakout, ADA/USDT has since been able to stabilize, bouncing off a critical demand zone. It runs from $0.03355 down to $0.02800, a significant area which found needed buyers in late 2018. The most recent bounce, as mentioned, has seen decent momentum to the upside. ADA has gained some 28% at the time of writing, from $0.03300 up to the current market price $0.04200. A retest of the broken down pattern is now being eyed.

Trade Recommendation

Despite the current upside momentum, potential short opportunities are being eyed. It is in anticipation of rejection upon a retest of the broken down the flag. The short area would be around $0.04350 up to $0.04650; targets eyed down at; $033500, $0.03000 and then $0.028000. Stops would be placed above the flag at $0.05000. The move would mark a technical breakout and retest of the detailed structure.

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.

Featured image courtesy of Shutterstock.

Author:
Ken has over 8 years exposure to the financial markets. During a large part of his career, he worked as an analyst, covering a variety of asset classes; forex, fixed income, commodities, equities and cryptocurrencies. Ken has gone on to become a regular contributor across several large news and analysis outlets.