Evidence of Cardano being in a bull market is present – but profit taking is necessary before a major correction to protect gains.

 

 

Cardano (ADA) continues to outperform the market and experience explosive gains. Not only are these gains powerful, but they have been sustained. While explosive and fast moves up are nice, they often sell off. During the worst bear market in cryptocurrency history, nearly every single spike in price in the entire cryptocurrency market was immediately and swiftly sold off. That has not happened with Cardano. Yes, there have been some strong selloffs in Cardano since the December 2018 lows, but each time price has rallied. For a proper and authentic trend, price needs to find support during major and minor dips. There should be some structure to the move and a persistence to the move. And so far this has been true for Cardano.

The chart above shows Cardano’s 4-hour chart with the Ichimoku Kinko Hyo system. The initial start of this entire move began when both Cardano and the Chikou Span move out of the Kumo on December 17th, 2019. There was some attempt to push ADA back down – a predictable price action move by the bearish traders – but instead, price found some support against the Tenken-Sen and Kijun-Sen. Price then spike again, moving up +21.23% from 0.00000914 on December 20th, 2019 to 0.00001108 on December 21st, 2018. It was then bears tried once again to push prices lower. But the first sign of a sustained move and a predictably bullish market was shown when Cardano again found support against the Kijun-Sen.

Another rally occurred from the swing low at 0.00001008 on December 21st, 2018 to 0.00001174 on December 24th, 2018 – a +17.17% move. After that drive and price spike higher, the first real test of whether Cardano was in a legitimate upswing occurred. A little over 100% of the swing from 0.00001008 to 0.00001174 was retraced. The key support zone that bulls found was against the final line of support at the bottom of the Kumo, Senkou Span B. This kind of activity has continued throughout the entirety of 2019. But can this move continue? Will it continue? There are some warning signs ahead.

One of the most overlook, unknown and underused components of the Ichimoku system is measuring current price and the distance it is from the Kijun-Sen. One of the skills I often teach is for the individual to identify the timeframe that they prefer to trade on. This important because the next skill I teach is for the individual to identify the major gaps between price and the Kijun-Sen. When this is done, you will find that there is a rough average maximum distance that price moves from the Kijun-Sen. When you identify those averages, they can create excellent mean reversion trade opportunities. But more importantly, they can help identify the maximum that an instrument will move up or down and create some very reachable profit targets before a corrective move. On this particular chart, Cardano is getting very, very close to that maximum range before a strong selloff occurs.