Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.
- The market structure was bearish.
- The descent into a strong bullish order block laid a clear invalidation level for would-be buyers.
Last Sunday (19 February), Cardano was trading at $0.411. In the past week, the price has fallen by 12.2% to trade at $0.361 at the time of writing.
The market structure was bearish on the lower timeframes. With Bitcoin headed lower on the charts, it appeared ADA bulls could face further losses.
How much are 1, 10, 100 ADA worth today?
Yet, the price action showed that Cardano buyers were presented with a buying opportunity on the token. Should the bulls take it?
The 4-hour bullish order block could spark a Cardano rally
Source: ADA/USDT on TradingView
On the face of it, the 4-hour and 1-hour market structures were bearish. They have formed lower highs and lower lows over the past week.
The RSI was at 32.9 showing strong bearish momentum. The OBV has also been in a downtrend over the past three days, signifying enormous selling pressure on the way down.
At the same time, this was a retest of the H4 bullish order block that ADA made on the rally earlier this month. Highlighted in cyan, the $0.345-$0.36 is a region where bulls can begin to reverse the prices.
Realistic or not, here’s ADA’s market cap in BTC’s terms
During the previous rally from this order block, the move upward was rapid and the pullback was slow. The $0.354 level is a support level from mid-January as well.
Therefore, despite the evidence from the indicators it was likely that ADA would recover and push toward $0.41 over the next week. A drop below $0.345 would invalidate this idea.
The Open Interest remained depressed but demand could be picking up
Source: Coinalyze
The 1-hour chart from Coinalyze showed Open Interest has fallen alongside the price over the past three days. ADA also dropped below $0.37 in this period.
Therefore, the inference was that long positions were discouraged and the market had a bearish sentiment in the near term. On the other hand, the spot CVD made a higher low and began to climb in the past few days, indicating demand in the market.
The liquidation charts also showed some long positions were liquidated on 24 February. In two hours, $1 million worth of longs were liquidated when Cardano dropped from $0.38 to $0.365 on 24 February.
Source: https://ambcrypto.com/cardano-ada-traders-can-expect-a-bullish-week-heres-why/