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ADA/USD Forecast: Cardano Continues to Fall Apart

By Christopher Lewis
Christopher Lewis has been trading Forex and has over 20 years experience in financial markets. Chris has been a regular contributor to Daily Forex since the early days of the site. He writes about Forex for several online publications, including FX Empire, Investing.com, and his own site, aptly named The Trader Guy. Chris favours technical analysis methods to identify his trades and likes to trade equity indices and commodities as well as Forex. He favours a longer-term trading style, and his trades often last for days or weeks.

The next couple of months could determine where the next couple of years ago.

Cardano fell again on Friday to reach the $0.43 level. This is an area that was visited just a couple of weeks ago, and when you look at the chart there’s almost nothing that suggests you should be a buyer of Cardano anytime soon. In fact, it’s starting to look like Cardano may be one of those projects that is a serious threat of falling apart. While I do like Cardano in general, the reality is that this is a lot like the technology sector in the late 1990s; there are going to be players in the space that are going to disappear. At this point, we have asked that same question of Cardano.

From a technical analysis standpoint, if you are short of Cardano, this is a beautiful downtrend. The 50-day EMA is currently sitting near the $0.72 level and is dropping at a nice sustainable pace. It should also be noted that it has separated quite nicely from the 200-day EMA, showing that the market most certainly should drop given enough time. That being said, if the market were to rally a bit from here, I believe that the $0.60 level is going to continue to offer resistance, and even if we break above there, the 50-day EMA will be a major problem.

I don’t like the idea of buying at this point, but I do recognize that eventually, Cardano could be a nice longer-term investment, assuming that it holds together. We are getting close to a point in time where a lot of these alternative coins are going to disappear, but there may be a few winners. Cardano certainly has a reasonable chance of being one of those winners, as there are some governmental cooperation factors to include, primarily in Africa.

That being said, this is a market that looks absolutely miserable, so if you are going to be a buyer, you have all the time in the world to get involved. If you are a trader, anytime this market pops just a bit, and especially near the $0.60 level, you have to get short. Furthermore, I would do so with leverage because this is about as bad of a chart as I have ever seen on a consistent basis. The next couple of months could determine where the next couple of years ago.

ADA/USD

Christopher Lewis
Christopher Lewis has been trading Forex and has over 20 years experience in financial markets. Chris has been a regular contributor to Daily Forex since the early days of the site. He writes about Forex for several online publications, including FX Empire, Investing.com, and his own site, aptly named The Trader Guy. Chris favours technical analysis methods to identify his trades and likes to trade equity indices and commodities as well as Forex. He favours a longer-term trading style, and his trades often last for days or weeks.

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