With Bitcoin still trading just above $9,000 at press time, altcoins have not felt any ripple effects. For the larger part, the altcoin market moves in cohesion with the king coin, which still has a 64 percent dominance on the collective cryptocurrency market capitalization.
Cardano, unlike the rest of the altcoin market, has been surging ahead since the March drop. In the past three months, its price has increased by over 350 percent.
Going by this monumental price increase, it’s no wonder that Cardano is trading in a strong upward channel, which has allowed it to reach its highest price in over a year. However, despite the strength of the channel, it’s starting to shake. The two trendlines of the channel have been increasingly moving into each other, with a breakout likely.
In the past three months, only on two occasions did the price move out of the channel – from 28 April to 29 April, and between 30 May and 11 June. The price trended sideways till 1 July and after colliding with the trendline, saw a massive push. Since the beginning of the month, ADA has pumped by 24 percent, moving to the top of the channel.
Source: ADAUSD via Trading View
While the closest support is down at $0.055, a drop of 72 percent, and unlikely to say the least, Cardano is caught between two key resistance levels. The first is placed at $0.088, which it passed on July 1, and the next is at $0.1, which it failed to break in June 2019.
Last year, like all altcoins, Cardano’s 2019 ATH was in June 2019. Since hitting the $0.1 high, its H2-2019 was dismal and closed the year almost 70 percent from this high.
The recent pump and ADA’s overall bullish movement in Q2 2019 was unexpected, to say the least from the investor’s point of view. The altcoin has a weak RSI of 63.68. In the past two months, ADA has been “overbought” i.e. RSI > 70 twice in April and June, following which it saw prolonged sideways movement. In the past week, RSI had hit the overbought ceiling twice, signalling a need to sell.
Given the current predicament of the market with Bitcoin trading stable, Cardano’s quick price rise last week, and the weak and declining RSI, a price fall is likely. With the current price trading at the ceiling of the channel, a rebound at just below $0.1 can be expected with the price unlikely to fall below the support level of $0.088.