ADA / Cardano: WHEN will the downtrend end?!
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Hi guys,
A friend asked me to have a glance at Cardano…
He asked “should I buy this stuff?”
I am just going to list the things I notice in the chart, and things you should be attentive to:
1) There have already been two triangle formations with crucial Fibonacci supports as a triangle basis. Both of them failed in breaking the triangle upward, followed by a further downward move in price.
2) We don’t have many longer term Fibonacci supports left as you can seee – only the blue one at 2323 sat. But, we also have a shorter term support line at 3138 sat, which we just tested for a first time just now on the daily.
3) We are closing in on the end of this third triangle. The question will be once more: “up” or “out”? With the knowledge that as for now, the bearish momentum is still intact (and remember: don’t bet against the trend or in the cheesy way that TA-ers always say “the trend is your friend”!)
4) Not everything is blood on the chart (well…unless if you have been HODL-ing this one since the top), but: MACD is curling - as slowly as possible though – to a bullish cross. That will be good news someday soon. Moreover, RSI is now in the heavily oversold area!
So…we are looking for that bullish cross giving us a first buy signal. We want that to be confirmed by an upward curl in the RSI (let’s get that momentum back up!)
5) We are looking even more at the candle sticks. They are as red as can be for now. Given that this is a Heikin Ashi chart (see my previous posts on TV for more explanation), we want to see a doji or spinning top candle first AND a break-out confirmation on that candle (i.e. We want to see some green candles follow the doji / spinning top candle to the extent that the resistance of previous candle sticks gets broken. See example “X” and “Y" in the chart.
6) We want volume! Green volume! We have none for the moment. Only ugly red little bars. Let’s replace those.
Conclusion:
- We are entering a new zone of truth: up or out of this triangle formation.
- Bearish sentiment is still intact for the moment. We are looking for signs of reversal.
- Signs of reversal already closing in: RSI is heavily oversold + almost a bullish MACD cross on the daily
- Signs of reversal we are still looking for: a doji candle signaling trend reversal, FOLLOWED BY green candle sticks that break the resistance formed by previous red candles + (more simply) break-out of that ugly downward trend channel (as represented by the upper white triangle resistance line).
- Lots of green Volume!!
- NOTE: this is purely the technical story. If you have important info on the fundamentals that might help us out in a trend reversal (e.g. Partnership announcements, rebranding, etc.) let my friend know in the comments! ;)
- No need to start a trade on this one yet. At least not when looking at the daily picture. Be patient, prudent, and with your eyes open :-) (and the short answer - just to bully you I put it in the end - is: stay away for now, it is still too early to make a (purely technically motivated) buy decision).
PS: this is by no means intended as formal investment / speculation / gambling advice
A friend asked me to have a glance at Cardano…
He asked “should I buy this stuff?”
I am just going to list the things I notice in the chart, and things you should be attentive to:
1) There have already been two triangle formations with crucial Fibonacci supports as a triangle basis. Both of them failed in breaking the triangle upward, followed by a further downward move in price.
2) We don’t have many longer term Fibonacci supports left as you can seee – only the blue one at 2323 sat. But, we also have a shorter term support line at 3138 sat, which we just tested for a first time just now on the daily.
3) We are closing in on the end of this third triangle. The question will be once more: “up” or “out”? With the knowledge that as for now, the bearish momentum is still intact (and remember: don’t bet against the trend or in the cheesy way that TA-ers always say “the trend is your friend”!)
4) Not everything is blood on the chart (well…unless if you have been HODL-ing this one since the top), but: MACD is curling - as slowly as possible though – to a bullish cross. That will be good news someday soon. Moreover, RSI is now in the heavily oversold area!
So…we are looking for that bullish cross giving us a first buy signal. We want that to be confirmed by an upward curl in the RSI (let’s get that momentum back up!)
5) We are looking even more at the candle sticks. They are as red as can be for now. Given that this is a Heikin Ashi chart (see my previous posts on TV for more explanation), we want to see a doji or spinning top candle first AND a break-out confirmation on that candle (i.e. We want to see some green candles follow the doji / spinning top candle to the extent that the resistance of previous candle sticks gets broken. See example “X” and “Y" in the chart.
6) We want volume! Green volume! We have none for the moment. Only ugly red little bars. Let’s replace those.
Conclusion:
- We are entering a new zone of truth: up or out of this triangle formation.
- Bearish sentiment is still intact for the moment. We are looking for signs of reversal.
- Signs of reversal already closing in: RSI is heavily oversold + almost a bullish MACD cross on the daily
- Signs of reversal we are still looking for: a doji candle signaling trend reversal, FOLLOWED BY green candle sticks that break the resistance formed by previous red candles + (more simply) break-out of that ugly downward trend channel (as represented by the upper white triangle resistance line).
- Lots of green Volume!!
- NOTE: this is purely the technical story. If you have important info on the fundamentals that might help us out in a trend reversal (e.g. Partnership announcements, rebranding, etc.) let my friend know in the comments! ;)
- No need to start a trade on this one yet. At least not when looking at the daily picture. Be patient, prudent, and with your eyes open :-) (and the short answer - just to bully you I put it in the end - is: stay away for now, it is still too early to make a (purely technically motivated) buy decision).
PS: this is by no means intended as formal investment / speculation / gambling advice
Anmerkung
Cardano becoming more interesting: We found support at the horizontal white line at 3145 sat, and we actually have a green doji candle. Could this be the first sign of a trend reversal?Anmerkung
Stay attentive!
Anmerkung
It's incredible how this one keeps on trading against that resistance line, ever more down. Like it just needs a little push of a bull run somewhere to blow right through it. But for the moment it is still waiting we should do :)
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