Cardano’s price rose again today, reaching almost 30 cents on the dollar. Many cryptocurrencies have been on the rise lately, and for Cardano this means that the important limit of 40 cents is getting closer. However, I see clear signs of a small downward correction on the short-term chart. This mainly has to do with the RSI. An indicator that shows the strength of a trend. In this analysis I discuss this indicator and what consequences it can have on the price of this cryptocurrency.
The price position of the eighth largest cryptocurrency
Thanks to the impressive rise, Cardano returned to the top 10 cryptocurrencies. It is now well above Dogecoin and this position is likely to remain stable for some time. In the long term, Cardano is in great shape. Yet there is a worrying development on the chart that we would rather not see: a bearish divergence with the RSI.
This simply means that the RSI is continuously making lower highs as indicated by the falling line, but Cardano is actually making higher highs. This initially appears to be positive for the Cardano price as it continues to rise. However, a situation where the price of this cryptocurrency rises while the RSI reaches lower peaks is called a “strong bearish divergence”. This indicates a trend reversal.
In the short term there is a trend reversal. The chart above is a 4-hour chart, so we are talking about a drop of a few percent at a time.
This correction could be stopped at 27 cents. There is very strong support that must absolutely be maintained. Therefore, it is important that the price does not fall below this support and close a 4-hour candle below as this will invalidate the support.
ADA/BTC looks very good
I mentioned in the introduction that Cardano looks very good in the long term. This not only has to do with the strong upward movement, but also with the Cardano/Bitcoin relationship. This is a graph showing which of the two performs better.
Instead of seeing a bearish divergence in the RSI, as is the case with ADA/USD, we see a very strong bullish divergence here: the price is making lower lows and the RSI is making higher lows. This signals an impending rise and suggests that Cardano will outperform Bitcoin. Are you ready?
Source: BTC Direct
Source link
Barry Siefert is an accomplished journalist and author at The Nation View. He is known for his expertise in the field of cryptocurrency, and has written extensively on the topic. With a background in finance and economics, Barry has a deep understanding of the underlying technology and market forces that drive the crypto industry.
