Cardano saw a good surge as the price broke out of the falling wedge. The price surged approximately 26% over the course of 48 hours. Since then, ADA has dropped 10% and in doing so formed another bullish pattern.
Hence, in a short-term time frame, longing ADA would be a good decision.
Cardano 1-hour chart
Source: ADAUSD TradingView
The one-hour chart showed the formation of a falling wedge, which is close to a breakout. Entering long here would yield higher profits than entering at the breakout, although it is with risk.
Apart from the bullish falling wedge pattern, the rationale behind this long position is that the RSI has bounced from the oversold zone and has enough leg space to head higher.
The reducing volume also supports for a breakout of the pattern. Additionally, the Stochastic RSI has formed a bullish crossover on a 1-hour time frame and is yet to form the same on a 4-hour time frame. Hence, we can expect this surge to go higher than actual take-profit levels.
The entry for this long trade would be at the current price of $0.0980 with a stop loss of 4.04% lower at $0.09408. The take-profit for this trade is 3 levels, the first is a conservative level at $0.1048, this would be a 7% surge from the current level. The second take profit level or the actual take profit level is at $0.1068, which yields an R of 2.23 with a surge of 9%.
The third and the final take-profit is at a level higher than the rest and is somewhat a greedy level since this is beyond the top of the wedge, which is a theoretically perfect take-profit or target.
However, considering the pattern is somewhat a variation of a bull flag, the flag pole ends at the $0.1096, hence, a close eye should be kept at this level. To do so, trailing profit can be used to maximize profit up to target 3 and beyond if the price does push higher.
