In the last couple of days, there has been excitement concerning ADA. While this is good news, I am sure the hodlers are not impressed by all the noise. Lovers of technical analysis (TA) will tell you the charts are not impressive in the slightest. Before continuing, I must disclose that I hold ADA. Those who have read my content know I never even talk about ADA. Someone close to me asked to take a quick look, hence this blog.
Let us start with the monthly chart; the trend has been downhill since September 2021 to today. And there is no end in sight. Charles Hoskinson (Cardano Head-Honcho) can sing, talk, and dance all he likes, but nothing is happening. Many are getting restless. The price dropped a whopping 91.93%! A story of devastation for hodlers and the hopefuls.
Now we move to the weekly. Here, we see matters more clearly. We see a series of Break of Structure (BOS) and Change of Character (CHoCH) on the chart. BOS is when the price breaks a previous higher high in an uptrend or a lower low in a downtrend. A CHoCH is when the price breaks a prior higher low in an uptrend or a lower high in a downtrend. As I write, there is a CHoCH on the chart, which means a fall. It does not look pretty.
Finally, we have the daily chart. You may have noticed that I did not touch on the Choppiness Index or the Laguerre RSI. I did not forget; this was deliberate. The daily chart shows nothing new. Nevertheless, ADAs' price action is below the Point of Control (PoC). PoC refers to the most popular price level where the highest volume of trades occurred within a specified time frame. The position of the PoC in relation to the current price can provide insights into market sentiment. If the PoC is above the current price, it may indicate bearish sentiment, while if it is below the current price, it may signal bullish sentiment. Currently, the ADA price level is below the PoC.
However, looking at the Choppiness Index, we can see plenty of energy at just over 60. Please remember that the Choppiness Index does not show overbought or oversold areas but energy in the market. In other words, the market can go up or down based on the amount of energy present. ADA does not appear to have anywhere to go but down.
In order to add more context to the discussion, I have added the Fibonacci retracement to the chart. There is some confluence between the 78.6% level and institutional selling. This area is likely to act as resistance to the price action. ADAs' price level fell to $0.23 on June 10th, breaking through the institutional buying area. Institutional buying is likely to act as support to the price. We will see more activity by the institutions and observant retail traders.
If you are a hodler or believer in the Cardano project, expect to continue this bumpy ride. As for a better ADA price, your guess is as good as mine.
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