Cardano is entering a resistance zone, ADA traders can expect a pullback

warning: The results of the following analysis are the author’s opinions only and should not be considered investment advice.

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On the price charts, the price history has seen significant gains in recent days. The possibility of a sharp decline in Bitcoin [BTC] The idea of ​​making more money threatened Cardano [ADA]. Cautious traders can wait for a strong trend to establish and trade in its direction. At the time of writing, the $0.49 area is emerging as strong resistance, while $0.44 and $0.46 are acting as support.

ADA – 4 hour chart

Source: ADA / USDT on TradingView

The 4 hour chart has formed lower highs over the past two weeks. It broke above $0.46 two days ago. The ADA approached the resistance area at $0.49, which has been a key level since early August.

Until the trading session closes above $0.49 in the H4 time frame, the idea would be to sell some retests of the $0.48-$0.49 mark. It can then be expected to go down to enter long positions.

Logic

Cardano posted 11% gain in one day, and here is a support area where you can buy

Source: ADA / USDT on TradingView

The hourly chart and its indicators are showing a bullish short term promise. While a rejection from $0.48 may occur in the next few hours, the charts also showed that the $0.455 area is a strong support.

The Magnificent Oscillator (AO) made higher highs during the previous trading day in response to Cardano’s recovery from $0.43. The accumulation/distribution line (A/D) has also developed over the past few days to form higher lows.

The $0.49 resistance area can be used to take profits. A dip in the support area (heavenly box) can be used as a buying opportunity.

conclusion

A rejection of $0.49 does not require a sharp move. If Bitcoin manages to cross the $19.6K mark, ADA will likely cross $0.49 as well. Due to uncertain market conditions, a small position size and low risk (0.5%) are recommended. $0.49 and $0.51 can be viewed as resistance areas on the upside.

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