Cardano (ADA) — Worth Watching
2024-09-25

After months of a downtrend, ADA seems to have found a bottom. Finally, slightly above the $0.30 level. 

Moreover, ADA printed a higher low on the daily timeframe, signaling buyers are stepping in at this level.

However, it's definitely not time to rush into a trade yet. 

In this post, I will explain everything you need to know to set up a proper trade. So, let's dive in!

1️⃣ Key Resistances to Watch
Let's start with the most important: ADA is approaching three critical resistances converging in the same region.
‣ EMA 200: ADA has been trading below the 200 EMA for months, with multiple failed attempts to break through.
‣ Upper Trendline of the Descending Channel: This trendline has been ADA's primary resistance during its downtrend. Breaking out of this channel could trigger a significant move.
‣ Recent High: ADA’s previous high aligns closely with these levels. 

2️⃣ Trade Setup
If ADA can break above these three key levels, it could spark a massive rally. But until that happens, it’s too early to enter.
‣ Entry: Wait for a break and close above $0.42. This level will confirm the breakout from the EMA, the descending channel trendline, and the previous high. 
‣ Target 1: $0.50 — First logical resistance after the breakout. Offers a potential ~20% gain.
‣ Target 2: Slightly below $0.60 — Stronger resistance and a potential 40% gain from the $0.42 entry.
‣ Stop Loss: To manage downside risk, a safe stop could be placed below $0.38, just under the recent higher low.

3️⃣ Volume Insight

The volume will be crucial in confirming any breakout. If ADA can push through these resistances with a significant increase in volume, it could trigger a longer-term trend reversal. However, without volume support, the chances of a false breakout increase.

In summary, the technical setup is compelling, but patience is key. Wait for a confirmed breakout before entering. If ADA can push through $0.42, it could signal the start of a strong rally.