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Cardano (ADA) Price Technical Analysis: Good Time to Accumulate for Long Term

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In the midst of the market correction or what some refer to as a bubble pop the price of Cardano has fallen from $1.35 at its peak on 4th of January to $0.0921 where it is trading today, bringing the price to where it was at the end of November last year which is a 94% depreciation.

Cardano ADA Price

The levels ADA is currently at are the first pop to the upside which we have seen back in November when the price fluctuated around $0.02. Actually, I remember that this sudden pop in price caught my attention both for the Cardano as a project and for trading. I have bought Cardano on those levels and have made a profitable trade, selling at $0.46 on 21th of December.

I was so devastated that I didn’t wait to sell later when the price hit 1$ feeling like a failure for quadrupling my investment in a matter of 20 days (funny how fomo works). I felt like I have missed out on the best ever price for Cardano which is why I am super happy now that the price has retraced back all the way to those levels where I have bought it at first. In today’s analysis, we will discuss if these are good times to be accumulating Cardano as the price ‘cooled off’ by 94%.

Analysis

Looking at the ADA/USD daily chart we can see that the price is back on the levels from where the all-time high was made back in December, but the price is on the lower, support levels of that range below the $0.137 horizontal upper support and is currently trading at $0.0923.

The price has been correcting after the exponential move that was unsustainable inside a triangle formation.

Zooming into the 4-hour chart I have examined the wave structure and labeled this correction accordingly.

As you can see after a 12345 exponential impulse this longer correction occurred with three consecutive corrections forming a double three correction on the primary degree. This correction could be extended by two more waves X and Z but we will see what happens after this current Y wave ends.

Zooming in to the hourly chart we can see the similarity with yesterday’s analysis of the price of Litecoin. The current wave is an impulse of a minor degree and it looks like the wave 5 hasn’t ended yet which is why I would be expecting more downside for the price of Cardano short-term.

Zooming out to the daily chart again I have projected my target to the 0.5 Fibonacci level or in price terms to $0.226 at the end of the expected impulse who would break out from the downtrends resistance line on the hourly chart, which is also the triangles resistance line on the daily chart as the corrective wave Y ends on the support.

Following the Elliott Wave Principle after an impulse wave, there is a correction after which another impulse wave occurs, so as the Y  wave of a primary degree ends it is right to expect another powerful impulse much like we saw in December last year. However, this correction could get extended by two more waves as I have pointed out and knowing the market context as a whole I think that that is more likely.

That scenario would mean that the impulse wave of a minor degree that is expected soon and would breakout off of the triangle on the daily chart would be the second X wave of the primary degree. That projection would end significantly lower than the price is currently as the final Z wave would push the price potentially to its beggining at $0.02.

Looking at the ADA/BTC chart we can see that there is much more room for the price to go down and as Bitcoin’s dominance increases in this bear market the altcoins are heading to total reset.

These are good times to be accumulating Cardano. As it is still unclear whether the price is heading further down I would suggest using dollar cost averaging – splitting the investment into multiple purchases in the different times so that after the final purchase you would get an average price. This strategy protects you both from fear of missing out and fear of uncertainty and doubt as you would be happy if the price goes both ways – if it goes up you are already in profit, and if it goes down you can purchase a bigger amount for the same buck.

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