Cardano(ADA) Price Set to Display an Interim Bounce Beyond $0.4, Will the Bulls Again Get Trapped?
The Cardano price previously flashed the possibility of a notable plunge below the crucial support at around $0.3. However, the asset has made an interim bounce to ignite a ‘u-shape- recovery to reclaim the levels around $0.385 before the end of the monthly trade. However, the ADA price may rise finely but a massive bearish pullback may be fast approaching that may drag the asset extremely lower.
The popular crypto has been bearish since the beginning of the year amid the prolonged crypto winter. The price drop was anticipated due to the ongoing change in the monetary policy which was due to the frequent change in the inflation rates that led to the change in the FED basis points. Hence, the ADA price made a notable drop below $0.47 in the past week while the other cryptos recoiled.
Presently, the ADA price forecast is slightly bullish but may soon drop heavily into a deep bearish well as the bears could soon book the profits to slash the price hard.
The crypto space is largely dependent on the Bitcoin price which is stuck up in a bearish trap. While the BTC price is presumed to find its lows somewhere around $12,000, the ADA price is also expected to drop to the bottom at around $0.24 in the next couple of weeks. However, prior to a drop to this level, the ADA price is expected to rise beyond $0.4 for a certain time.
In the above figure, one can notice the formed wave 3 in the global wave 5. Interestingly, the wave appears to have already ended as it has reached the 1.61 FIB extension levels which signals that it is time for a notable correction in the local sub-wave 4. Therefore, the upcoming trend could be a zig-zag ABC to reach the target at around $0.4 at 0.5 FIB levels.
Once the asset reaches these levels, the Cardano(ADA) price may drop heavily as the traders may just pull off the long positions which may further drag the price lower. Mainly due to the reason that the take profit levels for the longs have now dropped to $0.4, the possibility of the asset piercing through these levels without any bullish action is extremely difficult.
Therefore, even if the Cardano(ADA) price rises high, the bounce could be only a short-lived one as it may be an attempt to trap the bulls higher for a prolonged time ahead.