ADA Price Stabilizes After August Decline
You have probably noticed that the price of ADA has been relatively stable over the past few weeks. After experiencing a decline in August, where it dropped from $0.31 to $0.25, the price has now settled within a range. Currently, the upper limit of this range is at $0.275.
Interestingly, the live price of Cardano is dancing within a narrower range channel, with the same support at $0.25 but capped at $0.26.
ADA Price Holds Support, Awaiting a Breakout
By holding above the support level at $0.25, ADA price has managed to stabilize for the past three weeks. However, attempts to break out of this wider range have been unsuccessful, as the bullish momentum needed to sustain an uptrend has been lacking.
At the moment, the price is trading sideways within the narrower range, indicating a stalemate between buyers and sellers. This deadlock could be resolved if investors pay attention to the bullish signal from the Moving Average Convergence Divergence (MACD) indicator and start taking positions in Cardano before the upcoming sell-off.
A buy signal is generated when the blue MACD line crosses above the signal line. However, it is important to note that the indicator should also be moving upward towards the mean line (0.00) and into the positive region.
Opportunities Await a Breakout Above the 50-day EMA
Due to the current market volatility, traders may choose to refrain from actively trading Cardano. However, a breakout above the 50-day Exponential Moving Average (EMA) at $0.2584, and subsequently the narrow range limit, could present profitable opportunities within the wider range.
It is worth considering that new buy orders may start appearing above the 50-day EMA, with a stop loss set at the range support level of $0.25 or slightly lower. If a breakout occurs, accompanied by increased volume, profit booking might begin at the 100-day EMA. However, some traders may choose to hold their positions until ADA price reaches the upper range limit of $0.275.
Despite the weak market structure, bulls still have an influence on Cardano, as indicated by the Relative Strength Index (RSI) recovering to 40 after reaching the oversold region.
In order for ADA to sustain an uptrend, investors need to be willing to invest in the token and build momentum. Currently, the On-Balance Volume indicator shows that the inflow and outflow of funds are balanced, resulting in ADA price lacking sufficient liquidity.
Hot Take:
As a crypto reader, it is important to keep a close eye on ADA’s price movements and indicators. While the market may be choppy at the moment, a breakout above the 50-day EMA could provide profitable opportunities. However, it is crucial to assess the market conditions and consider stop losses to manage potential risks. Remember, investing in cryptocurrencies involves careful analysis and decision-making. Stay informed and make wise investment choices.
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