This week $ADA neither confirmed downtrend nor able to form a bottom. It is expected to continue with the corrective waves until the range is broken through. Let’s explore the hypothesis from different angles.
In May $ADA formed a candle that can be treated as a Top and as a continuation candle. The next candle would tell the story. However, if you look at a grossly overbought RSI, it is hard to believe that it can go any higher. At the same time, MACD is on the rise. With such mixed signals, one can only make a guess.
After the clean Bearish Engulfing 2 weeks ago and a High-wave doji of previous week, this week $ADA tried to repair the damage. Though, the bullish power was not sufficient to clearly cancel both previous candles. From candles perspective, a week needs to close at least above 1.828 to consider a rally in place. So far, bearish forces prevail.
Odds: Moderately Bearish
This is the most interesting one. On Friday $ADA made a Bearish Engulfing that was confirmed on Saturday. Note that the price moved back to under the 8 EMA line despite the last-minute before the cut-off attempts to close above.
The huge candle on May 19 seemed to determine the range: 1.47 – 2.00. Until we see two candles in a row through a boundary, a direction remains undetermined.
There was no clear motive wave in any direction so far. It means that the downside is likely not complete yet. A triangle is a very possible shape and it looks like it may need a few days to complete. If it is indeed a triangle/pennant, a break is expected down and I already published the perspective targets. If price surpasses point “c”, 1.888, the triangle will be invalidated, but it would not mean that a rally has started. Perhaps another bearish shape is being developed.
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