Cardano Price Analysis

Cardano Dec 18, 2020

Taking a quick look at the price chart for Cardano because, over the last few weeks, we saw Cardano gain a significant amount of ground.

Zooming in a bit to the end of the line up above, we can see Cardano nudging against the overhead resistance point.

At first glance, the price action of  Cardano seemed a bit opaque, but upon closer inspection, we can see that a potential flat top may be forming on the chart:

Quick Review: Ascending Triangle Formation (continuation pattern)

Below is an example from 'stockcharts' (great one to reference):

source: https://school.stockcharts.com/doku.php?id=chart_analysis:chart_patterns:ascending_triangle_continuation

Below are excerpts from the same source showing the general criteria for this chart formation:

You want to see this type of chart formation in a bull market vs. bear / sideways movement conditions.

Forecasting Potential Price Action for Cardano Going Forward

Check out the image below (which provides a forecast for Cardano's prospective future price action):

Of course, there is no guarantee that the above takes place - especially when considering the plethora of additional factors that one must keep in mind when assessing the viability of a particular chart formation completing itself.

But before discussing those, its worth taking a look at the potential downside associated with entering in a long position at this very point in time:

At -20%, that's a steep potential loss

However, it is worth noting that Cardano has not experienced that much of a backslide in quite some time.

Additionally, the price reaction for Cardano after failing to break the overhead resistance is almost nonexistent.

See below:

Balance of Power RSI for Cardano

This is perhaps one of the more bullish indicator readings out of all of the ones that we'll be looking at for this technical analysis review for Cardano.

Remaining on the daily, we decided to give the 'Balance of Power RSI' a look.

The Balance of Power indicator shows an incredible surge in underlying buy pressure. Let's check it out:

Typically this indicator signals values with incredible accuracy and forecasting (due to the nature of the Balance of Power indicator itself, which is then smoothed over with an EMA, with RSI values extracted and overlaid with the RSI ob/os zones determined by placing the edge at one standard deviation above & below the 'mean' obtained from a series of price data collected over weeks of training data).

Librehash Relative Strength Index

Let's take a look at our custom Relative Strength Index indicator below:

As we can see from the attached picture, the RSI(14) on the daily resolution for Cardano exhibits a series of higher highs, and higher lows.

Librehash Reversion Ribbon

This indicator trades similar to the MACD if you've ever used it (if you're not familiar, then sorry! We'll explain this later).

Let's take a look at the reversion ribbon overlaid on the regular Cardano price chart:

The two most recent green candles are dark green, signaling heavy buy pressure. Typically when this is displayed on the Reversion Ribbon, that's a sign of a potential impending reverse / cooling off (consolidation) for the price for the next few periods (potentially).

This would match our assumption that Cardano may potentially consolidate in the near future (for a short while) before continuing on its bullish run:

Librehash Moving Fibs

To round things off, here's a look at the Librehash Moving Fibs for Cardano (this one was plotted on the H2 resolution for good measure):

This should give folks an idea of the potential 'micro-movements' that may occur between periods.

Conclusion

Cardano looks like one that could be on its way to breaking out above the overhead resistance in due time.

Best strategy seems to be to wait until that breakout does happen (identify it with the criteria from 'stockcharts' that we pasted in here), then entering a long position upon the breakout.

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