As expected, ADA/BTC corrected after hitting the 0.00004 resistance. Those who bought the false breakout had to cut their losses. This contributed to the selling pressure which drove the pair down to 0.00002416. While we expected the pair to drop all the way down to the 0.00002 support, it seems that bulls are out to play. This gives us an opportunity to buy the possible higher low.
Technical analysis show that Cardano/Bitcoin is respecting the 23.6% Fibonacci level. Bulls entered the buying picture as soon as the pair went below this level. The significantly increased volume in the last three days affirms this view.
In addition, the 4-day, 9-day, and 21-day moving averages are all finding their way back to the daily candle. If you notice, the moving averages are reversing their direction indicating a possible move up.
The strategy is to buy the lower high as close to 0.0000265 as possible. As long as bulls are above this level, they are likely to inspire another rally to our target of 0.00004. Sell immediately once target is hit. We might see another wave down before ADA/BTC can resume its bull run.
The process may take less than month.
Daily Chart of Cardano/Bitcoin on Binance
As of this writing, the Cardano/Bitcoin pair is trading at 0.00002918 on Binance.
Summary of Strategy
Buy: Buy as close to 0.0000265 as possible.
Disclaimer: The writer owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.
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