2020-7-5 22:00 |
Cardano (ADA) has been one of the best performing top altcoins seen throughout 2020, only trailing the gains posted by Chainlink and Tezos The crypto has been seeing heightened momentum in recent weeks due to the launch of the highly anticipated Shelley mainnet upgrade This update’s rollout coupled with a few positive news developments have bolstered its buyers Despite showing signs of overt strength, ADA is currently pushing up against a significant resistance level This has caused it to flash some warning signs that are leading some analysts to grow increasingly cautious on its near-term outlook Cardano (ADA) has posted an intense rally independent of the aggregated cryptocurrency market over the past few weeks. This rally hasn’t been unwarranted either, as the release of the long-awaited and much-delayed Shelley mainnet has been fanning the flames guiding the cryptocurrency’s recent uptrend. Cardano now appears to be navigating into a massive resistance region that has been holding strong for the past couple of days. If buyers are unable to surmount this resistance, it could confirm a few bearish signs that analysts have been watching – indicating that a retrace could be imminent. Cardano Navigates into Heavy Resistance Following News-Based Rally At the time of writing, Cardano is trading up nearly 4% at its current price of $0.10. From a weekly perspective, this marks a massive climb from a low of $0.08 that was set just a few days ago and an even larger climb from its June 27th low of $0.075. The cryptocurrency has been trending higher over the past few months, posting consistent gains despite Bitcoin’s multi-month bout of sideways trading. BTC began consolidating between $9,000 and $10,000 in early May, at which point Cardano was trading at under $0.05. From here, ADA slowly climbed higher until it incurred parabolic momentum in late-May. It now appears to be facing some heavy resistance at just above its current price level, which is a price region that analysts have been watching for quite some time. Because this is a news-driven rally, fueled by the Shelley mainnet rollout and the imminent addition of ADA staking capabilities to Coinbase Custody, it is possible that it will prove to be more sustainable than hype-induced movements. ADA Flashes Some Bearish Divergences as Analysts Grow Cautious From a technical standpoint, analysts are growing cautious about where Cardano trends next. One trader explained that he isn’t quite ready to “fade” ADA despite it posting some bearish divergences due to its underlying strength, but he is closely watching its reaction to its current resistance. “There are some HTF bear divs developing but I wouldn’t fade coins that showed multi-week strength. Take profits, don’t blindly short alts just because they kept on dying the last 2 years,” he said while pointing to the chart seen below. Image Courtesy of Crypto Rangutang. Chart via TradingView. Unless IOHK – Cardano’s parent company – releases more positive news in the week ahead, ADA’s parabolic rally may begin slowing. Featured image from Shutterstock. Charts from TradingView.
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