Cardano has been on a losing streak for quite a while now. The coin has slipped from being in the top 10 largest cryptocurrencies to its current rank – 14. Cardano is now the 14th largest cryptocurrency based on market cap.
At the time of writing, ADA was valued at $0.0314 and had a market cap of $822 million and sits just below Chainlink. The 24-hour trading volume for ADA is far less compared to the other coins, ie., $142 million. This would indicate low liquidity and a whale dump or manipulation is easy.
- Cardano has formed a cup and handle pattern, which indicates a bullish breakout in the medium term.
- The ‘handle’ of the pattern is yet to be formed and will more than 24 hours to be completed. This will cause the price to dip as low as $0.0285 and rise back up to the neckline.
- Successful completion of this pattern could mean a 35-40% surge for ADA.
Four Hour Cardano Chart
A cup and handle is typically a bullish pattern, however, at the time of writing, the pattern is not yet confirmed, as the handle needs to be formed. Even with the handle being formed, the pattern is still potential as the main identifying feature for the pattern completeness includes, the breach of the neckline.
For Cardano, the neckline is formed at $0.034 to $0.035. Moreover, the price is being rejected by the 50-day moving average (MA) (blue), this is, in turn, forming the cup and handle pattern.
In the formation of the handle, the price will depreciate from its current value of $0.0311 to $0.0291 and surge back to $0.0311. After the handle is completed, the breach of the neckline is to be observed. A successful breach of the neckline would allow ADA to surge from $0.035 to $0.048, a total of 35% surge from the neckline.
The relative strength index is also falling in line with this narrative. The RSI’s rejection at the overbought zone is pushing to the neutral zone (50).
The only thing holding Cardano from straying away from this pattern is the king coin and its dominance over altcoins. Hence, if Bitcoin faces massive volatility in either direction, the cup and handle narrative will fall apart.
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