Breakout Expected in Cardano (ADA), as it Gets Squeezed Into a Triangle
Cryptocurrencies are getting a ride from Bitcoin, which has been surging during the last two weeks. BTC/USD just broke above $60,000 for the first time since April, which is a major milestone on this bullish trend, while Ethereum is heading for $4,000. So, the sentiment remains bullish in the crypto market, although not all cryptocurrencies are benefiting from it. Cardano remains stuck within a tight range, without any will to start pushing higher, so let’s have a look at this crypto
Cardano Daily Chart Analysis – The Range is Tightening
The 20 and 100 SMAs are squeezing Cardano in between them
Cardano, which is a cross-chain network, performed really well during the bullish period in the crypto market in August. It outperformed the other two major cryptos (Bitcoin and Ethereum) as it surged from around $1 where it formed a support zone to above $3, putting it in third place in terms of market capitalization.
Moving averages couldn’t catch up with the price, showing that the pace of the uptrend was strong, but September was a bad month for Cardano. The 50 SMA provided some support on the daily chart, but it was eventually broken, as the sentiment turned quite bearish in the market.
But, the 100 SMA turned into support, and it has been pushing the lows higher in ADA/USD. But the 200 SMA (gray) has turned into resistance at the top, and it is pushing the highs lower. So, a triangle is forming on the daily chart, and a breakout is expected to happen soon, which should be to the upside, since the situation in the crypto market looks positive right now.
Cardano Weekly Chart Analysis – The 20 SMA Holding as Support
The chart setup points to a bounce higher off the 20 SMA soon
On the weekly chart, we see that ADA/USD broke above the range after forming a small hammer candlestick at the bottom, which is a bullish reversing signal. The price increased above May’s high, but it started reversing in September, after the doji candlestick at the top, which is a bearish reversing signal after the increase.
The price reversed lower, but the 20 SMA (gray) turned into support on this timeframe chart. The price has formed a few doji/hammer candlesticks, which are bullish reversing signals after the retreat, but despite that anf the Alonzo upgrade, which took place on September 12, we are not seeing a bullish move. With that upgrade, Cardano joined the club of smart contracts-enabled blockchains. But, it hasn’t helped the price action, although the weekly chart points up, so let’s wait and see when the move will come. We are already long on this crypto, with a ADA/USDT buy signal.
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