Journalist
Posted:
- The technical preference for a higher timeframe was strongly bullish.
- The liquidation heatmaps revealed two critical support levels where the bulls could propel another rally.
Cardano [ADA] reached a high of $0.68 on December 14 before falling lower. The higher timeframe market structure remained bullish, but a key support level at $0.6 was left undefended in recent days.
Earlier this week, AMBCrypto reported that Cardano was witnessing high development activity. The total number of contributions to development activities was also high. This would convince long-term investors that ADA is a good asset to hold.
The expansion of 23.6% and more has been important
Source: ADA/USDT on TradingView
On November 16, ADA reached the 23.6% expansion level before being rejected. It finally surpassed this level on December 5 and has made rapid gains since then.
On the way up, the extension levels of 123.6% and 223.6% have also been respected.
The 123.6% level was retested as support on December 11, and a daily trading session did not close below it. Likewise, the 223.6% level on December 14 has turned away buyers.
The $0.595 level was significant in August 2022, marking a monthly high. The price has reacted from this level on the 4-hour timeframes and below, marking it a level to watch.
A decline below $0.512 would be needed to turn the one-day market structure bearish. Meanwhile, the OBV has fallen in recent days but could trend higher.
The RSI dropped to 61 to indicate that bullish momentum was still strong, but had weakened somewhat compared to a few days ago.
The liquidity pools in the North could be wiped clean
Source: Hyblok
AMBCrypto analyzed the heatmap of the liquidation levels and found that the $0.54 level was a strong candidate for a bullish reversal. However, it was unclear whether prices would move further south from here.
The $0.62-$0.64 area also represented a wide range of estimated liquidation levels.
Read Cardanos [ADA] Price forecast 2023-24
So it was possible that ADA prices could rally to $0.64 before falling. Further afield, the $0.65-$0.67 zone could also be tested.
With the bulls unable to defend the technically important $0.595 level, it was likely that a dip to $0.54 could happen soon.
Disclaimer: The information presented does not constitute financial, investment, trading or other advice and is solely the opinion of the author.