The Cardano (ADA) price has been increasing rapidly since it reached a low on Sept 23. However, the price has yet to clear a significant resistance level and has not confirmed the upward trend.

Current Movement

The ADA price has been falling since July 24, when it reached a top of $0.154. The decline continued without much relief until a low of $0.075 was reached on Sept 23. Since then, the price has begun a rapid upward move.

At the time of writing, ADA was trading inside a minor resistance area found between $0.102 – $0.108, the 0.5 – 0.618 Fib levels of the previous decline.

In a broader range, ADA is trading between support and resistance at $0.075 and $0.125, respectively.

On the daily time-frame, technical indicators are bullish:

• The MACD has generated bullish divergence and is increasing.
• The RSI has moved above 50
• The Stochastic Oscillator has made a bullish cross and is also moving upwards.

These are signs that the price is likely to continue moving upwards.

Short-Term

The price has already broken out from the descending resistance line but has not moved upwards with strength.

The MACD is still increasing, but the RSI has started to form bearish divergence, a sign of weakness.

Therefore, we could see a decline that validates the resistance line the price just broke out from and the minor $0.10 support area before the price resumes its upward movement.

Wave Count

The price reached a low of $0.074 and began the current upward movement. The move from the lows looks impulsive, so this may be the beginning of a new upward trend.

However, the longer-term count is not clear. The most likely scenario is that the price has completed a complex W-X-Y correction (shown in black below), in which the A:C waves had a 1:1 ratio (orange).

If so, then the current movement is an upward A-B-C correction (orange), which explains the impulsive move from the lows, since the C wave comprises an impulse.

The previously mentioned $0.125 resistance area also coincides with a descending resistance line drawn from the Jul, 24 high. So until the price successfully breaks out, the current move could be a correction rather than the beginning of a new upward trend.

To conclude, while ADA could increase in the short-term, the direction of the longer-term trend is uncertain unless the price breaks out above $0.123. There are conflicting signs from technical indicators, horizontal levels, and Elliott wave theory, making it difficult to determine the direction of the future trend.

What do you think we will see in the coming week / month? Do you agree with the above analysis? Also If you like this content, consider tipping the article / following me, so more people see this content and we get a nice discussion going on. 

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