Cardano (ADA) was among the best performers among the top cryptocurrencies on June 6 as traders assessed a key upgrade that promises to enhance its blockchain’s smart contract capabilities.
Similarly, Cardano’s “Mary” hard fork in March 2021 preceded ADA’s 1,600%-plus price boom.
ADA bull traps
The previous price rallies that led to the hard fork events also occurred amid an expansionary macro-environment. At the time, interest rates were near-zero, and the Federal Reserve was buying $120 billion worth of government bonds every month.
From the technical perspective, ADA now tests a resistance confluence comprising a falling trendline and its 50-day exponential moving average (50-day EMA; the red wave) near $0.66 and a horizontal trendline (the neckline) near $0.62 that constitutes what appears to be a “double bottom” pattern.
As a rule of technical analysis, traders measure the double bottom’s breakout target by adding the distance between the bottom levels and the neckline to the breakout point. That paints a June target of $0.87, up around 40% from June ‘s price and likely ahead of the Vasil upgrade.
A follow-up rally could also see ADA testing its 200-day exponential moving average (200-day EMA; the blue wave) near $1 for a breakout or pullback. A pullback seems more likely, however, given the prevailing macro risks.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.
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