Trade Recommendation: Cardano (ADA)
Cardano/US Dollar is a cryptocurrency that looks ripe for bottom-picking. It’s been correcting ever since it posted the 2019 high of $0.10649 on June 26th. Recently, plunged to as low as $0.0626 on July 11th. That’s a drop of over 40% in about two weeks.
Nevertheless, the cryptocurrency is showing signs of bearish exhaustion. That’s why we’re considering to play the bounce.
Technical analysis shows that ADA/USD is respecting weekly support of $0.065. We have this view for several reasons.
First, bulls protected this level on July 11th. Even though the market fell briefly below the support, bulls bought it up quickly. So far, Cardano has managed to stay above that price area.
Also, technical indicators are favoring the bulls. The daily RSI is flashing oversold readings. This tells us that we can expect some selling relief in the coming days. Also, the 200-day moving average is crawling just below $0.065. It will act as an additional support that will help keep prices from falling further.
Now, we have a setup where the price is trading close to two key support areas. On top of that, we can anticipate supply to dry up due to oversold conditions. This is a solid combination where bulls can instigate a bounce.
The strategy is to buy as close to $0.065 as possible. If bulls can keep prices from falling lower, they will likely generate a rally to our targets of $0.0778 and $0.09.
The process may take less than a month.
Daily Chart of Cardano/US Dollar on Kraken
Summary of Strategy
Buy: As close to $0.065 as possible.
Targets: $0.0778 and $0.09.
Disclaimer: The writer 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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