ADAUSD Fighting to Break Out-RejectedADA has been in a very tight consolidation pattern and refuses to fall to the 2.4 or even 2.5 levels. And now, it looks like that probably will not happen. Well, at least the 2.4 price point likely won't happen. The reason for this is the 1hr 200MA line is creeping up and is at about 2.5 right now. ADA has been pretty good at staying above or riding the 200MA line. It very rarely seeps below it, and when it does, it's not for very long. If by any chance ADA manages to retest the bottom of the descending triangle, it really won't have very much room to fall. There is a ton of volume for support at 2.5 not to mention the 200MA is at 2.5. If it doesn't test and fall, even better. The slope of the upward trend is something that everyone should also take note of. It is not very steep. What that means for day traders is they likely will not have much action pricewise. The steeper the slope the higher the gains and losses in a short amount of time. The wide base slope has far more support and is like to grow, just a bit more slowly. That tells me people are buying this as a long term investment, and not just ADA, all crypto. However, ADA is outperforming most other coins at the moment in terms of gains over time.
What is also interesting is the fact that on Monday the market cap for ADA was $93,729,022,478 on Tuesday it was $87,464,149,417 and today it is $88,011,861,282. That tells me there was a large money rotation out of crypto on Tuesday. This was most like due to large asset management firms that transitioned a giant chunk of money back into the stock market after the announcement of the US infrastructure deal coming to fruition. What is interesting to note is that today ADA's market cap is still moving forward. Hence the weird patterning and almost constant consolidation.
So what's the point? The bad news is ADA will likely retest the bottom of the descending triangle and the price will likely fall to find support. The good news is, it really cant fall too far. The market cap is increasing, the support volume is large, the 200MA is right below, and people are buying. Interestingly, it looks like they are holding on to it as a future investment. That is great news for ADA.
Now lets talk about why ADA has so much strength. Cardano is about to release smart contract September 12 with the Alonzo release. This addition makes it a viable competitor to ETH as an open source platform. Right now, it is just a glorified ledger. As a person who plans to be a Cadano Developer once Alonzo is released, it makes me wonder how far ADA can go. I have heard people say it cannot go to 100 dollars because it will need around a 3T market cap. But considering in the past 2 weeks ADA has added 31B to its market cap, it's definitely not out of the realm of possibility. Also, considering Grayscale Investments has picked it up, I think it has a LOT more room to grow.
Tell me what you think?
This is not financial advice. DYODD.
