Cardano ADA price has rallied 121% between July 20 and August 15 and is currently hovering above a supply zone’s upper limit at price of $2.16. Out of this massive and exponential growth, ADA rallied 23% on or around the time of the Alonzo announcement.
This thrust pushed the so-called “Ethereum killer” to slice through a supply zone, extending from $1.83 to $2.16 level. If ADA price manages to bounce off $2.16 and stay above it, it will confirm a successful flip into a demand zone. Such a move will promote more gains and a retest of the all-time high at price of $2.46 in some cases.
However, ADA price might not be able to sustain this uptrend and might undergo a minor correction. The Momentum Reversal Indicator has put up warning signs in the form of a yellow down arrow on the 12-hour chart. If ADA price continues to rally, this index will flash a sell signal in the form of a red ‘one’ candlestick that forecasts a one-to-four candlestick correction.
Therefore, investors need to watch out for ADA price for a move in either direction.
If the buying pressure overwhelms the bearish momentum, ADA price will stay above $2.16 and make a run at the all-time high at $2.46. If the bid orders continue to pour, Cardano ADA price might set up a new all-time high at $2.87 level, coinciding with the 127.2% Fibonacci retracement level.
On the flip side, a failure to sustain above $2.16 might lead to an 8% retracement to $1.97 and, in some cases, $1.82.
But a breakdown of the $1.82 support level barrier will invalidate the bullish thesis and potentially confirm a reversal of the trend.
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