Cardano (ADA) has recovered to a key Fibonacci retracement level (Fib). Let’s figure out whether it can break higher or begin a correction
Last week, Cardano (ADA) broke through an important resistance area and tested a local high at $0.63. Despite the subsequent correction, the bullish scenario for ADA remains relevant in the long term.
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Cardano tests Fibonacci retracement level
On Monday, December 11, ADA formed a local bottom at $0.52 and rebounded to the Fibonacci retracement level (Fib) 0.382, which is located in the $0.61 area.
Despite the fact that it was not possible to overcome this resistance the first time, the medium-term prospects for Cardano remain bullish. Since October, ADA has risen in price by more than 170%.
The Moving Average Convergence Divergence histogram on the monthly chart is rising, with the MACD lines forming a bullish crossover. The relative strength index (RSI) is in neutral territory.
Cardano (ADA) chart. Source: Tradingview
In addition, the ADA price successfully broke through the 50-month resistance level created by the exponential moving average (EMA) at $0.44. Now it acts as a support for Cardano.
Cardano weekly chart confirms bullish trend
On the weekly ADA chart, the indicators are giving mixed signals. On the one hand, exponential moving averages (EMA) formed a “death cross”. It warns traders that the bullish trend is still unstable. In addition, the relative strength index (RSI) is in the strongly overbought zone and signals a possible correction.
On the other hand, the Moving Average Convergence Divergence (MACD) histogram is rising and the MACD lines have crossed in a bullish direction.
Cardano (ADA) price chart. Source: Tradingview
Additional support for Cardano comes from the 50-week EMA at $0.38, as well as the 200-week EMA at $0.44. These EMA levels can stabilize the Cardano price in case of a correction.
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The daily chart shows a bullish trajectory
On the daily chart, ADA’s trend remains bullish. This forecast is confirmed by the golden cross formed by exponential moving averages (EMA). Moreover, the moving average convergence divergence (MACD) lines are in bullish crossover and the MACD histogram remains in an upward trend, confirming the bullish scenario.
Cardano (ADA) price chart. Source: Tradingview
The relative strength index (RSI) is in the strongly overbought area. This potentially indicates the risk of a correction. However, there are no clear reversal signals yet.
conclusions
Over the past few weeks, the price of Cardano has increased by more than 75%. Technical analysis indicates a continuation of the uptrend. The main criterion for confirming bullish dynamics will be a breakthrough of the 0.382 Fibonacci retracement level, which is located in the $0.61 area. In this case, ADA will head towards the next long-term resistance at $0.86.
A rollback from the mentioned Fib level will provoke a deeper correction to the area of $0.484 and $0.38.
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2023-12-12 16:30:00
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