Buy Cardano ADA/USD at the 200 Daily SMA or Wait for $1?
Cardano has been bearish again, but the decline might have ended at the 200 daily SMA
Cardano made quite a climb early this year, increasing from around $0.14 at the end of December last year to $2.47 in the middle of May, which means an appreciation of around 20 times, or 2,000%, in less than five months. Moving averages were doing a great job as support indicators during pullbacks lower, particularly the 50 SMA (yellow) and the 100 SMA (green).
After the first strong bullish period, which lasted until late February, we saw a consolidation period, with the ADA/USD trading in a range between $1 and $1.50 until early May, when the second bullish leg sent Cardano up to $2.47. That came as most of the crypto market was stagnating from April until May, while Cardano was still keeping the strong bullish momentum, along with some other major cryptos, showing which are the most interesting cryptocurrencies right now.
But the crash came eventually, and it sent the ADA/USD down to almost $1, although the previous support held well, and it has been holding since then, which makes it the ultimate target for sellers. Cardano is bearish above $1, and buyers still remain in charge, despite the bearish period of the last two months.
However, the support zone might be moving higher in cryptocurrencies, since the massive bearish momentum has faded, and in Cardano that support might be moving higher with the 200 SMA (purple) on the daily chart. The 50 and 100 SMAs have turned into resistance now, while the price bounced off the 200 SMA in June, so it might act as support again now.
The price is already retreating higher, after getting pretty close to that moving average earlier today, so the latest bearish move might have come to an end, and we will probably see a bounce from here at 1.25, up to the 50 and 100 SMAs, which come at around $1.48. The risk/reward ratio would be around 1:1, since we would have to place the stop below $1. So, let’s follow the price action in the crypto market, and if sellers don’t resume the decline again soon, it probably means that they have given up. For now, let’s just watch and see. If we open a buy signal here, you will find it on our forex signals page.
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