The Cardano price is currently breaking out of a descending channel. Improving technicals could now put ADA back on the path to $1.8000.
After weathering the storm of weekend selling, some positive signs are starting to emerge for Cardano.
Like much of the cryptocurrency market, ADA had a positive trading week, closing +15%, at $1.5100. However, over the last 2 weeks, a pattern has emerged.
Crypto recovers Monday through Friday, only to be sold again on the weekend. On Monday, the Cardano price opened around $1.5000and Wednesday had gained +22% to $1.83000.
In the last two trading days of the week, the price gave back the gains, ending almost unchanged on the week.
In sluggish weekend trade, ADA slipped further, trading as low as $1.3349 this morning. The decline from Wednesday’s high created a descending trend line on the short time frame chart.
The bounce from this morning’s lows to the current $1.5580 has taken the price above this line. This bullish breakout suggests more upside may be on the cards.
On the 2-hour chart, we can see the price has cleared the descending trend in place from Wednesday’s high. The breakout at $1.4505 also took the Cardano price above the resistance offered at yesterday’s low.
Whilst this is a positive development, there is still work ahead. The chart shows a series of highs from yesterday around $1.5740. This is the next area of resistance facing the price.
However, if ADA can push through this resistance, it opens the door to $1.8300.
My overall view of ADA is very positive, and it remains one of my top picks in the cryptocurrency space. Nonetheless, the market is still nervous from the recent crash, and I cannot discount another round of liquidation. Therefore, longs may wish to place a stop below today’s $1.3349 low.
If the Cardano price slips below this level, it would suggest the buying momentum has turned and negate the bullish call.
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