Cardano short-term Price Analysis: 5 August
Priced at $0.1426 Cardano is the 8th largest cryptocurrency in the world. The recent surge due to the announcement of the Shelley launch caused a massive pump since April 2020. During this surge, the token has seen a 500-600% appreciation in its value. Not did this surge push it into the top 10 ranks, but it also propelled it to the 8th rank.
At press time, the token has seen a 4.07% surge in the last 24 hours and this might be the end of the surge for a while now. The downtrend for Cardano looks feasible considering the resistance at $0.1551 aka the 50%-Fibonacci level and the price’s 3-time rejection at this level.
Assuming the price doesn’t breach this level, a short position can be set up here. The short position’s entry is at $0.1431 and the stop-loss at $0.1547. However, depending on the momentum of this drop, we can expect the price to hit $0.1203, which is the first target or $0.09219, which is the second target.
The targets yield a risk-to-reward ratio of 1.95 and 4.25 with a price depreciation of 15% and 35% respectively.
To add more value to this, the RSI indicator on the four-hour time frame flash overbought, hence, an eventual decline can be expected soon.
Although the fundamentals look bullish with the number of pools increasing every day. In the last two days, the number of pools has increased by ~100 with over 6.38 billion in ADA staked. The ADA staked has, however, increased by 2 billion ADA.
Regardless of the bullish fundamentals, the price will see a drop soon and perhaps similar to the one seen on August 02, 2020. This was when Bitcoin crashed by 7% causing liquidations of over a billion dollars across different exchanges.
However, one aspect that cannot be neglected is that ADA is at levels, last seen in September 2018, soon after the bull run of 2017. Hence, the momentum might be enough to propel the coin through the aforementioned resistance. Hence, it is advised to wait for confirmation before opening any position