- Cardano has a bullish market structure
- It moved within the previous range and is expected to move higher
Cardano [ADA] fell below the six-week range on January 18. It has retested the USD 0.453 support level and has recovered strongly. The lows of $0.51 reversed to provide support again, and liquidity around $0.6 should pull prices there.
A recent AMBCrypto report highlighted that the chances of an ADA recovery were good. This view was confirmed by the bullish market structure break.
Another resistance/support flip encourages buyers
The move above $0.52 created a bullish move in the market structure on the 12-hour chart. Moreover, the move above the resistance at $0.524 saw the level turn into support.
Together, they pointed to a bullish bias for ADA in the coming days.
Source: ADA/USDT on TradingView
The RSI climbed back above the neutral 50, signaling a shift in momentum. The OBV, which has been on a downward trend since mid-December, rose slightly. However, the indicator was not yet in a strong uptrend.
This showed that buying volume was only slightly stronger, despite strong gains over the past week. Since the $0.524 level is now a support, the OBV is expected to rise further.
Can ADA soar past $0.6?
The price action chart showed an imbalance (white box) and a bearish order block (cyan box) in the $0.56-$0.57 zone. This meant that it was a tight resistance zone that took the bulls some time to break past.
Source: Hyblok
AMBCrypto analyzed Hyblock’s estimated liquidation levels heatmap data. This data was consistent with the price action findings. First, ADA has captured a large amount of liquidity by moving into the $0.524-$0.536 zone.
This could be followed by a small retracement towards $0.51 as the bulls consolidate their position. The liquidity heatmap showed the $0.554-$0.564. the $0.6 and $0.62 regions would likely pull ADA prices closer.
Read Cardanos [ADA] Price forecast 2024-25
By comparison, liquidation levels in the South were sparse. Therefore, a move up is much more likely than a move down to $0.46-$0.47.
If the bulls can scale the USD 0.57 resistance, it is expected to reach the USD 0.62 level. This is because it represents a local high where a large amount of liquidity would likely be present.
Disclaimer: The information presented does not constitute financial advice, investment advice, trading advice or any other form of advice and is solely the opinion of the writer