ADA/USD is hovering over 80 cents as of this writing, this after producing a relatively nice gain yesterday and climbing above the 83 and half cents level for a moment. Unfortunately for ADA/USD, the higher climb proved short lived, and only traders who were using take profit orders were likely able to cash out of winning positions if they anticipated the rise.
ADA/USD remains within the lower rungs of its bearish trend which it has been experiencing since the first week of September 2021. Cardano continues to be mired near prices it was trading in last February of 2021, this as it had begun its assault higher with exuberant pricing following in the steps of the broad cryptocurrency market. Over the past year ADA/USD has actually lost value if an investor bought Cardano starting in the second week of February 2021.
For day traders the acknowledgement that ADA/USD has been suffering from a long term trend downwards can be looked at with different perspectives. After hitting values over 3.00000000 in early September of last year, it is possible Cardano has been vastly oversold and has room to traverse higher. However, in the short term, the obvious support levels which scream out loud technically should serve as a warning sign.
If ADA/USD begins to flirt below the 80 cents level and starts to make the 79 cents juncture appear vulnerable, this could spark additional selling. The likelihood that long term holders of Cardano will begin to jump ship and dump their ADA/USD at this point remains questionable. If a true proponent of ADA/USD continues to hold on who bought the cryptocurrency around 31 cents in January of 2021, they may remain stubborn.
The broad cryptocurrency market remains troublesome. Bullish speculators who believe the entire cryptocurrency sphere has been oversold may want to be buyers now, but how long are they willing to wait for a move higher?
Also questions arise regarding overnight trading costs, particularly if a speculator is merely speculating on ADA/USD and not putting actual coins into their own cryptocurrency wallets. If ADA/USD continues to flirt with the 80 cents mark and shows sustained weakness, speculators may want to actually wager on more downside action for quick hitting trades. If the 77 cents level breaks, this could spell trouble.
However, if support levels continue to also provide consolidation in the near term, some speculators may be willing to look for fast trades which seek small reversals upwards that challenge nearby resistance ratios. All traders should use ample risk management, because ADA/USD appears ready to potentially become volatile if its rather tight trading band produced the past week vanishes.
Current Resistance: 0.81300000
Current Support: 0.79220000
High Target: 0.83400000
Low Target: 0.761000