Cardano (ADA) The price declined below the weekly support level of $1.20 to gather liquidity. A quick recovery could provide a 20% gain and push ADA towards the $1.42 level.
On the other hand, a ‘four-hour candlestick’ that can register below the $1.02 level will invalidate the aforementioned bullish argument.
Cardano (ADA) price It has been trading below a critical support level for some time now. The short-term bearish outlook could be creating a bottom that could reverse the current trend. A rebound above said resistance would be key to resuming a run higher quickly.
Cardano Price Tries To Recover
Cardano price set multiple lows around the $1.20 support on December 4, 2021, leaving a lot of “sell-stop” liquidity below it. On January 8, the ADA managed to break through this hurdle and collected unused liquidity, signaling market maker manipulation.
A quick recovery above $1.20 would be key to starting a major uptrend as there is a higher time frame (weekly) support level. Traders can enter long positions at the current market level ($1.18) and wait for ADA to break through the $1.20 barrier.
The resistance level at $1.35 is where traders can start unloading their holdings. Other levels at which market participants can scale their profits include the $1.39 and $1.42 levels. In some cases, Cardano price may retest the weekly resistance level at $1.46, hitting the four-hour supply zone and swinging between $1.46 and $1.52.
For traders looking to minimize their losses, the recommended stop-loss level can be placed just below the January 8 low of $1.12, providing a 4RR (risk-to-reward) trade. Otherwise, the stop-loss could easily be placed below the lower border of the $1.02 to $1.19 demand zone. This setup, however, reveals a trade of 1.55RR.
Disclaimer: What is written here is not investment advice. Cryptocurrency investments are high-risk investments. Every investment decision is under the individual’s own responsibility. Finally, Koinfinans and the author of this content cannot be held responsible for personal investment decisions.