21.6 C
27 September 2023
Image default

Cardano (ADA) Just Formed This Textbook Bullish Reversal Against Bitcoin

Since the highs that were seen in July, Cardano (ADA) has seen a strong retracement against Bitcoin. The altcoin has collapsed by dozens of percent against the leading cryptocurrency, crushed despite a rally in many other crypto assets.

Cardano may soon be able to outpace Bitcoin, though, according to a popular technical indicator that predicts reversals in the trend of an asset.

Cardano Could Soon Reverse Higher Against Bitcoin

Cardano is poised to reverse against Bitcoin to the upside according to the Tom Demark Sequential. The sequential is a time-based indicator that prints “9” and “13” candles when an asset is poised to find an inflection point in its trend.

In the case of ADA, a “buy 9” candle has formed, suggesting it will soon see upside against Bitcoin.

Chart of ADA's price action against Bitcoin since the middle of May with the Tom Demark Sequential. Chart from a Telegram channel tracking instances of the Tom Demark Sequntial "9" and "13" candles. Chart from TradingView.com

Not everyone is convinced that this scenario will play out, though.

One analyst noted that ADA is likely on the verge of “falling off a cliff,” pointing to how each of the recent rallies has been weaker as evidenced by the declining buying volume:

“Just took a look at a random major $ADA. Notice how each rally is weaker, with a smaller impulse and declining volume. There’s red flags everywhere to me. Yes there’s no confirmation but we really can see some pullbacks deeper than you expect. This looks ready to fall off a cliff.”

Chart of ADA's price action against the dollar with analysis by Pentoshi (@pentosh1 on Twitter), the head technical analyst of Blockfyre. Chart from TradingView.com

This was echoed by another trader, who noted that Cardano’s price action looks exactly like it did at the start of 2019 after a parabolic rally.

Related Reading: Is BTC Really In a Bull Market? Here’s Why Analysts Think BTC Isn’t

All Eyes on Bitcoin

Volatility in the Bitcoin market, though, could suppress the price action of altcoins like Cardano.

Analysts say that in periods of low volatility, BTC has the potential to outperform altcoins. Mohit Sorout of Bitazu Capital told NewsBTC:

“Most (altcoin) cycles in crypto are centered around bitcoin volatility. When it dries up, no one wants to trade btc which becomes evident from the volume as well. This leads to a large uptick in speculation on alts, driving their prices up – typically alts with strong narratives & large scale memetic behavior get the most volumes.”

Whether or not Bitcoin sees a spike of volatility, though, is not clear.

News Source

Related posts

3 Main Reasons Bitcoin’s Price Plummeted 14% in 15 Minutes to $8,600


Bitcoin Price Analysis: BTC to start rolling into the abyss if $10,400 gives way


Billionaire Paul Tudor Jones Says Bitcoin Is in Its First Inning