Cardano (ADA) Technical Analysis: RSI Approaching Neutral Level, Bullish Divergence Spotted
- PHPzOriginal
- 2024-07-16 17:09:12921browse
Let's examine the insights shared by our Technical Analyst at UseTheBitcoin as he walks us through his personal trading approach and observations on Cardano (ADA).
A Technical Analyst from UseTheBitcoin shares his trading approach and observations on Cardano (ADA).
Daily Timeframe Analysis
When examining ADA on a daily timeframe, the analysis reveals that the Relative Strength Index (RSI) is approaching the neutral level, around 50. Historically, every time the RSI crosses above this level, it indicates increasing buying momentum. This observation suggests that prices could rise shortly after such a crossover.
The analyst notes that while Cardano may not be suitable for long-term holding, these potential swings can be used to traders’ advantage. By monitoring these RSI levels, traders can potentially enter and exit trades to capitalize on these short-term price movements.
Bullish Divergence
Examining the RSI on a daily timeframe reveals that it is moving upward even as prices are declining. This situation is known as a bullish divergence and often precedes price increases. A bullish divergence occurs when the RSI makes higher lows while the price makes lower lows, indicating that the selling pressure is weakening and a reversal to the upside might be imminent.
Key Support Level
Zooming out and examining the $0.40 price level, a significant pattern emerges. Historically, every time ADA’s price reaches this level, it tends to rebound and move higher. Currently, ADA is again at the $0.40 mark.
The analysis concludes by posing the question: Will history repeat itself, and will the price rise again? Only time will tell.
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