In the past 30 days, Bitcoin (BTC/USD) has rallied roughly 20% in price and is still going strong. However, Cardano (ADA/USD) is notably lagging behind Bitcoin and is lower by around 10% over the same 30 day period.
Let’s take a closer look at Cardano’s monthly chart to see if there are any signs of confirmation that Cardano can rally and start to bridge the underperformance gap.
What the Cardano chart is showing
- ADA has formed a symmetrical triangle and has given a breakout after three months of consolidation.
- However, the volumes after the breakout on Thursday are still very low and the breakout is not looking strong at all.
- Cardano is heading towards a re-test of the trendline as of Friday and if it is able to sustain above it, the next few months would be looking very promising for the coin.
- A break of the structure was also observed with the lower highs being engulfed with the higher with the breakout candle of Thursday, however, ADA gave a weak closing showing that the breakout is not too strong.
- $1.951 is a very important demand zone for ADA as below this level there are no demand zones.
- To avoid getting caught in a fake breakout, a successful re-test at the level of $2.163, this has to be seen before entering long in ADA.
- If the re-test fails a short entry can also be taken as a false breakout can yield some great targets.
- If a successful re-test is seen we can expect a target of $2.959 as the first take profit level and a new all-time high as the second.
- A long term target of $4.35 can be set which is the 1.618 point for the Fibonacci Levels as the 1.618 level could become a strong level of resistance for ADA.
Should you buy ADA this week?
- ADA has tested the $2.261 level many times on Thursday and Friday and it is looking like it will fall below that level which is supporting the initial view of a re-test of the trend line.
- A short entry can also be taken when the $2.60 level is broken, however caution must be taken as the 200-day moving average is right below the support.
- A target of $2.163 can be set if a short position is taken.
A long entry should not be taken until a clear re-test of the trend line is seen with an increase in volumes, once a successful retest is seen, broader momentum within the cryptocurrency market could help push Cardano to a new all-time higher.
The post Should you buy Cardano as it lags Bitcoin’s gains? What the charts say appeared first on Invezz.