A chain reaction is triggered:
in my previous post I predicted a chain reaction in the price line of Cardano, if you missed my previous post then here is the link:
Click here to visit previous article on publishOx
As in my previous post we have seen that in the month of March after strong bearish trend the ADA completed the final leg of big bullish Butterfly pattern on the monthly chart. And as per Fibonacci sequence of the bullish Butterfly the priceline was supposed to take the bullish divergence from the potential reversal zone and enter in the Fibonacci projection from 0.382 to 0.786 Fib level. And this was the Fibonacci projection of A to D leg. In the meanwhile on the smaller time period 2 day chart the ADA formed another bullish harmonic Crab pattern and entered in the buying zone of this Crab pattern as well. And we can see that 1st price action took a bullish divergence from the buying zone Crab pattern and triggered a kind of chain reaction that the priceline from the potential reversal zone of the big bulllish Butterfly pattern on the monthly chart also moved up and entered in the sell zone or Fibonacci projection area and produced more than 184% bullish rally.
Bullish Crab pattern before execution:
Bullish Crab pattern after execution:
Big Bullish Butterfly pattern before execution:
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Big Bullish Butterfly pattern after execution produced more than 184% gains:
Now what next?
Now the question arises that if both bullish patterns are executed then whether the priceline of Cardano will continue this bullish rally or not? Because so far the ADA has produced more than 184% Big gains. Is there any possibility that the Cardano will move more up to produce more gains? For that we need to study some more indicators and support and resistance levels let's have a look at them.
Support and resistance levels:
If we switch to the daily chart to watch the different support and resistance levels. Then we can observe that the strong bearish rally in the month of March 2020 the price action was trying to breakdown the $0.027 support. This is a very strong support that is not broken down since December 2018 and this time it has worked well and did not let the priceline move down. From here the price action moved up and broke out the next resistance level $0.045. At this time the price action has started a correction rally to re-test the previous resistance as support and after successfull re-test of this previous resistance as support the price action can move up to break out the next resistance level $0.065. And after breaking out the $0.065 resistance level we have key level resistance at $0.10. Once the price action will break out this key level resistance then it can turn more bullish to achieve the highest price ever in the history of Cardano.
On the same daily chart the moving averages are also very in good postions. After the bullish rally of March 2020 the price action broke out all the simple moving averages with the time period of 25, 50, then 200 and at the end it has broken out the 100 simple moving average. Sofar the price action has re-tested the 25 and 50 simple moving averages as a support. After breaking them out the price action did not re-tested the 100 and 200 SMAs resistance levels as support. Therefore we can expect that the priceline may start correction rally from here and re-test the 100 and 200 simple moving average resistance levels as support.
On short term we can expect a correction rally to retest the $0.045 support and 100 and 200 SMAs. The continuation of bullish rally depends on the success of this re-test if the priceline will not breakdown these supports and then it can further move up to breakout the key level resistance at $10 and in case of breaking out the $0.10 resistance it can turn more bullish than previous bullish move.
Note: This idea is education purpose only and not intended to be investment advice, please seek a duly licensed professional and do you own research before any investment.