When the ADA price broke higher Friday, the rally reversed at the 100-day moving average. Now Cardano is gearing up for a second attempt at the resistance.
Cardano is currently trading at $1.3297, -$0.076 (-0.30%).
The number 5 ranked cryptocurrency has a market cap of around $42 billion, just short of 4th placed, Binance Coin’s $45 Billion value.
Four days ago, I discussed the importance of the 100 and 200-day moving averages. At the time, the ADA price had bounced convincingly from the 200 DMA at $0.9861 and was attempting to clear the 100 DMA at $1.4317.
ADA failed the first attempt at clearing the 100 DMA and subsequently lost 20% in the two days that followed. Moreover, it fell back into a downtrend. However, strength in Bitcoin, and more so Ethereum, has once more lifted Cardano above the trend line.
But now, ADA will be faced with the important moving average for the second time in the last four days.
The daily chart is painting a fairly positive picture for Cardano.
A clear, supportive trend line is visible below the market. The trend links the 23rd of April low at $0.8900 with the 19th of May crypto crash, $0.9179 bottom. Notably, during last weeks sell-off, the trend at $0.9680 was almost in sync with the 200-day moving average at $0.9861. Therefore, it should come as no surprise the ADA price jumped 45% after coming within a whisker of the two import support levels.
Also evident is a downtrend in place from the April 16th all-time high at $2.5147. Up until yesterday, the price had never managed a daily close above this line.
I would consider this positive development to increase the chances of making it second time lucky for Cardano at the 200 DMA.
Of course, if this latest breakout results in disappointment, Cardano will likely return to the support of the 200 DMA and the triple-bottom horizontal support. I would view this as a critical area. As long as ADA sustains this level, the chance of recovery is intact. But any close beneath would turn the momentum sharply in favour of the bears.
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