CardanoShort
ADA → Cardano Racing Toward Resistance! Will We Reverse!?
Updated
Cardano is racing toward the Resistance Zone after a successful break to the upside from last week's bull flag, as predicted in our last analysis. We're getting closer to resistance and the big question is, do we short it?
How do we trade this? 🤔
If you're still in a long from bull flag breakout, good! Don't exit yet as we have not seen a reversal signal. ADA likely will make it to $0.45, I would take profits around that price area. Once we hit the resistance zone it's reasonable to expect a pullback or even a reversal. If we get a bear signal bar followed by a confirmation bar closing on or near its low, it's reasonable to short.
We are in a bullish macro trend, so a short would be playing the reversal where Probability is low, but Risk/Reward is over 1:2. I would take half profits at 1:1 around $0.422, move the stop loss up to your entry price and swing the rest until we see the reversal bar to the upside.
💡 Trade Idea 💡
Short Entry: $0.446
🟥 Stop Loss: $0.468
✅ Take Profit #1: $0.422
✅ Take Profit #2: $0.403
⚖️ Risk/Reward Ratio: 1:2
🔑 Key Takeaways 🔑
1. Bull Breakout of 200EMA Followed by Bull Run.
2. Bull Flag Continuation Pattern Playing Out.
3. Resistance Zone Approaching, Look for Sell Signal.
4. Do Not Short Until Sell Signal and Bear Confirmation Candle Close.
5. RSI at 65.00, Above Moving Average. More Up Before Down.
⚠️ Risk Warning! ⚠️
Past performance is not necessarily indicative of future results. You are solely responsible for your trades. Trade at your own risk!
Like 👍 and comment if you found this analysis useful!
How do we trade this? 🤔
If you're still in a long from bull flag breakout, good! Don't exit yet as we have not seen a reversal signal. ADA likely will make it to $0.45, I would take profits around that price area. Once we hit the resistance zone it's reasonable to expect a pullback or even a reversal. If we get a bear signal bar followed by a confirmation bar closing on or near its low, it's reasonable to short.
We are in a bullish macro trend, so a short would be playing the reversal where Probability is low, but Risk/Reward is over 1:2. I would take half profits at 1:1 around $0.422, move the stop loss up to your entry price and swing the rest until we see the reversal bar to the upside.
💡 Trade Idea 💡
Short Entry: $0.446
🟥 Stop Loss: $0.468
✅ Take Profit #1: $0.422
✅ Take Profit #2: $0.403
⚖️ Risk/Reward Ratio: 1:2
🔑 Key Takeaways 🔑
1. Bull Breakout of 200EMA Followed by Bull Run.
2. Bull Flag Continuation Pattern Playing Out.
3. Resistance Zone Approaching, Look for Sell Signal.
4. Do Not Short Until Sell Signal and Bear Confirmation Candle Close.
5. RSI at 65.00, Above Moving Average. More Up Before Down.
⚠️ Risk Warning! ⚠️
Past performance is not necessarily indicative of future results. You are solely responsible for your trades. Trade at your own risk!
Like 👍 and comment if you found this analysis useful!
Note
ADA is continuing to the upside as expected! No sign of a reversal so we'll see what happens as we get closed to the Resistance Zone.Note
As my analysis projected, ADA has touched the bottom of the Resistance Zone at $0.45! Now we need to see that sell signal candle followed by a confirmation candle to justify a short. Keep an eye on the 4HR candle for more detail, but we need a good bear candle closing on or near its low on the daily to maintain this analysis.More updates to come as the price unfolds!
Note
Zooming into the 4HR chart, we can see the sell signals at Resistance #1. This is a perfect example of why we don't short sell signals alone, but wait for confirmation. We had there sell signals followed by a decent bear bar. But this was just a pullback after a strong leg up, not a confirmation and the price shot back up into the resistance zone. Let's see if the price fails to break Resistance Zone #1 this time around and if so, we again look for a strong bear candle closing on or near its low below the zone. Best to stick to the Daily chart for the signals to reduce a false flag.
More updates to come as they unfold!
Note
There we have it folks! A breakout of the Resistance Zone! The reversal setup never played out because we didn't get a confirmation to short below the Resistance Zone. Now that the breakout has shot the price up to $0.52, we're a great distance from the potential Support Zone (Formerly the Resistance Zone). That's where our protective stop would be if we longed. Best to wait for a pullback and show of Support before entering a long.
A fresh ADA analysis will be coming soon to address the next moves!
-Joe Dean
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