Short

Cardano (ADA) to 80 cents

Updated

This is not going to be popular, I know. However the moment emotion surpasses reason is the same time profits bleed. There is a number of reasons to be very bearish at this moment on ADA. Why?

On the above 10-day chart:

1) Bearish divergence on ADA / USD has been in play for some months now following a ‘great sell’ signal on the above 10-day chart around $1.40. But it went to $3! Don’t forget price action started rising from 2 cent last March, that was a 4000% gain.

2) Higher highs in Price action lower highs on the oscillators. 9 oscillators are currently diverging with price action (circled in purple). Look left! The last time this many oscillators were diverging with price action a 60% correction occurred to support.

3) The 10-day ADA / Bitcoin chart (below) prints a copy of the dollar chart with 8 oscillators diverging.

4) A ‘Hanging man’ candle just printed on this 10-day chart. Look left. Those candles are bearish, especially on this time scale.

Is it possible price action increase further? For sure.

Is it probable? In the macro picture.. very unlikely.

1st target is 80 cents. Do no assume it will hold!

Good luck!

WW

10-day ADA / BTC chart - bearish divergences

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For the bulls - $1.80 - expect a strong bounce from here, perhaps back to the all time high.

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A strong bounce was confirmed.

Price action to $3.50 area by mid-October providing a 2nd short opportunity.

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Watch the coming days carefully. On the 4-day chart below price action is notably trading inside a descending triangle formation, a breakout to the underside would be a target of $1.05.

Latterly price action is clinging on to the 21-week EMA for dear life (yellow line). Do you see price action below $1.96? That's your cue to get out.

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Had a few folks messaging with the query 'but you're bullish now on ADA?'

Short answer: No.

In fact, I'd go as far as to say it is one of the most bearish charts out there. Since the 'great sell' and 'incredible sell' alerts price action has continued to print higher highs with lower highs in the oscillators on the 10-day chart (below).

You can go long but the risk of downside is very high..

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Be careful, bears and bulls. Price action is trading inside a tight symmetrical triangle formation as shown on the 4-day chart below.

Wait for confirmation before trading this pattern. A breakout to the underside results in price action target of $1.06 and $3.20 to the upside.

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PS: one way or another this formation resolves before November 7th.

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Price action breaks down from symmetrical triangle formation on the 4-day chart. You know my target! Price action must simply move to the upper side before the close of the weekly candle.

Also notice price action has fallen through the 21-week EMA (yellow line) bull market support band.

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The $1.95 support failed. The next support is $1.80, it must hold to prevent a collapse to $1.36.

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There goes $1.80..

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ADA breaks through the bull market support band (yellow line), the 21-week EMA

RSI crossed down 50 (purple circles) on the weekly chart below. Each time this happened in the past after a significant rally, price action collapsed between 50-60%.

If you're still bullish ask yourself one question in respect of above, will this time be different?

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On the daily chart below price action closes below the 3-day / 50-EMA (thick blue line), that's certainly not good. Look for support around $1.44

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How many folks are watching the monthly chart? Something significant occurred as November came to a close.

The rectangle boxes below show past and present as Stochastic RSI crossed down 40. Remember this is a monthly chart, a cross down of 40 on this scale is not to be ignored. On the last occasion price action dropped 80%. Will this time be different?

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Almost there, 40-45 cents to go. Be patient.

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Price action must close above $1.40 today to avoid further downside. On the 2-day chart below price action prints below the 2-day/200-day EMA. A body closing under here... well look left.

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Price action is projected to print a death cross in the coming weeks, watch it closely. Meanwhile a relief rally to $1.70 might be up and coming. Use it as an option to get out, not get greedy.

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Another message this morning asking if this idea is over.

Stochastic RSI on the monthly chart crossed down 40! (Purple circle). Look left!

Short answer. No, not over. In fact I’m less and less confident 80 cents will stop the free fall. If it fails look at the 15-20 cents area for support.

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Some new targets to look out for, 50 cents and 7 cents.

I know many of you below were not as bearish as myself back at $2.35, yet here we are -50% later. On the 4-day chart below there's some observations that need attention.

1) The bearish rising wedge + breakout. The extension of this breakout is pointing towards 50 cents. This would also be a break of market structure.

2) The head and shoulders pattern. A rally could be seen to form the right shoulder. If market structure is broken following this rally, then the neckline extension measures to 7 cents.

Good luck!

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Not far from target now as 2-day death cross approaches. We just need Crapadano fan boys to give up the fight and capitulate.

Once 80 cents strikes, don't pile in. That's not how markets work, wait for consolidation. I'll post a long idea when that time comes.

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Once the ADA maximalists fail to keep the $1 support level a final leg down to target can be expected.

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There goes the $1 support. There's some bullish divergence printing on a the weekly chart. Once the 80 cent level is hit a rally to $1.20 / $1.30 may be seen. Don't get excited, this will be a test of the 21-week EMA. Look left.

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A comment below, might be useful for others regarding the head and shoulders pattern on the daily:

Is this the head and shoulders pattern you refer? I see the neckline is already broken with the measured extension almost right on the 80 cent target.

It is very unlikely a rally to $1.20 would first occur before the head and shoulder extension is tested. If a buy signal appears, I might update. The last sell signal was at $2.50.

Even after the 80 cent target I would expect further drop in price action to 70 cents to test the lower side of the downward trending channel.

At 70 cents price action is up 2500% since March 2020.

Trade closed: target reached

Target reached, smug mode on.

When will a long idea for ADA be published? Maybe later in the year, a consolidation period first needs to be observed.

Note

This idea was incredibly unpopular when first published. Read the comments below. Now, a number of "short" ideas are published on tradingview.com
To say market participants are befuddle is an understatement.

2-week chart

without_worries

BTC
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Weblink: patreon.com/withoutworries

Allow 3-6 months on ideas. Not investment advice. DYOR

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