Key Takeaways
Cardano’s charts highlighted short-term bullish conviction based on the taker buy/sell volume, but this could be a bull trap. The longer-term outlook was also bullish, but the $0.822 and $1-levels will be vital for the next trend.
Cardano [ADA] bulls have been working hard to hold on to the short-term support level at $0.846.In fact, the altcoin has hiked by 51% since 8 July, when it was trading at $0.572. At the time of writing, the crypto market sentiment was mixed, with the past couple of weeks seeing high volatility.
Bitcoin [BTC] was also trading just above the $112k support. Worth noting, however, that the crypto is exposed to the risk of a slide towards $100k, something that could drag Cardano lower.
Coinglass data revealed that the ADA long-short ratio saw a slight majority for the longs. This meant that the taker buy volume was slightly higher – A sign of bullishness in the short-term. However, other data is needed to work out the nuances.
The long/short (accounts) suggested that 74% of accounts were long. Even among Binance’s top traders, 77% of positions were long. They affirmed the bullish short-term expectations, but also opened the debate around a bull trap.
Where can Cardano go in the coming weeks?
Source: ADA/USDT on TradingView
Resolving the short-term bull/bear debate is tricky and heavily reliant on Bitcoin’s price movements. Zooming out, Cardano’s chart showed that the 1-day market structure has remained bullish for the altcoin.
The Awesome Oscillator seemed to be sinking towards the zero line lately, showing subdued momentum. And yet, the price has not made a significant lower low. A drop below $0.822 would be required to flip the 1-day structure bearishly.
The rising OBV saw a minor pullback over the past two weeks, but the selling pressure was not overwhelming.
Beyond $1, the $1.2 and $1.36-$1.4 zones would the next notable resistances.
The 3-month liquidation heatmap highlighted the $1-area as a key magnetic zone. This may be the price target for Cardano in the coming weeks. To the south, the $0.82-level is also an attractive target.
It lined up with the higher low ADA set on the daily chart. A sweep of the $0.8-lows followed by a run to $1 and higher may be likely, provided Bitcoin does not sink towards $100k in August and September.
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion
