Hello everyone! This is Luther SF Trader, and I'm here to bring you an analysis of ADA Cardano. I believe there are many fans of this cryptocurrency, just like me, haha.
On the weekly chart, we can observe a trend failure, and prices are above the 20-period simple moving average (SMA). The volume is supporting this move, indicating its validity. Note that during the entire downtrend, the volume remained sideways compared to previous volumes, suggesting more to come. We are already in a Bull Market.
Specifically, looking at the ADA Cardano weekly chart, let's start the analysis from macro to micro. The retracement cycle is complete, meeting all its rules in the current price range of $0.26, which is considered a very good buying range.
In my verdict, the context is bullish. The market has developed, forming five downward waves, renewing lows and creating divergence for liquidity. The market has built an accumulation structure and is now in a clear uptrend.
Why do I say this? On the weekly chart, it broke the high of the last valid pivot, signaling the end of the downtrend and the beginning of an uptrend. The 20-period moving average, which respected many prices during the fall, is now pointing upwards. The market has consolidated in a typical accumulation phase at the end of a trend, and the moving average is pointing up, indicating an uptrend.
The volume started to increase during the entire downtrend, remaining small compared to previous volumes. This suggests that there is a lot more to happen, and we are only at the beginning of an uptrend. The volume level during ADA's previous Bull Market suggests that there is much more to come.
For those concerned, rest assured; we are just at the beginning. On the daily chart, we had waves 1, 2, 3, and are currently in wave 4, according to Ralph Nelson Elliot's wave theory, with potential for a fifth wave. We had a deep wave 2, almost reaching 78% retracement of wave 1, indicating typical characteristics of a wave 2 with a deep retracement.
Now we are in a wave 4, which usually has a shallower retracement, not yet reaching 38% of the entire wave 3. We are likely heading towards a wave 5. If we use the expansion of the movement from wave 1 anchored in the current wave 4, we can see where wave 5 might go. According to Elliot's theory, if wave 3 is an extended wave, wave 5 is generally the size of wave 1, so it could reach at least $0.82, potentially going a bit further to $1.17-$1.20 USD. This is to complete this micro cycle before a retracement and truly enter a Bull Market. We should at least reach $0.82 in the short term, suggesting upside potential.
In conclusion, the context is still bullish in the long term. If you're thinking about the Bull Market for the next two years, there's nothing to worry about – it's completely bullish.
Note: This is not financial advice; I have only provided an analysis. Investing is at your own risk.
What is your opinion on ADA Cardano? Do you see the context as bullish or not?
