Bitcoin’s (BTC) price has been consolidating in recent days, which kickstarted the rest of the cryptocurrency market. This frequently happens as Bitcoin starts to consolidate, it gives the chance for the rest of the market to catch up.
Cardano (ADA) is one such cryptocurrency, which gained 170% in February alone with its price nearing $1 for the first time ever.
Cardano’s BTC pair is showing signs of life
ADA/BTC 3-day chart. Source: TradingView
However, lots of information can be derived from the BTC chart as it’s just starting to wake up from its bear market slumber. The recent run created a new higher high — the highest since July 2018 — which is a big signal for the uptrend to continue.
However, the all-time high in the BTC pair is still 380% away. Such a run would, of course, push its value in USD even higher.
Altcoins have been showing massive strength in their USD pairs, as many of them are creating new all-time highs. However, the BTC pairs of these altcoins still have a lot of upside potential.
This means that the market may just be starting the new bull cycle. In Cardano’s case, the BTC pair is approaching a significant resistance zone, where a breakout doesn’t seem likely. However, once ADA price breaks through this resistance zone, continuation is expected toward 0.00003500 sats.
Bitcoin dominance bottoming out
Bitcoin Dominance 3-day chart. Source: TradingView
A substantial correction typically occurs after a major rally. Anyone who has ever held altcoins knows this very well. The Bitcoin dominance chart can frequently tell you when those corrections are going to occur.
Historically, the best period to buy altcoins is in December. This was confirmed again recently as altcoins started to see massive gains in the new year.
However, the chart also shows that Bitcoin dominance relief rallies can occur before more downside. This often happens in February and March, during which a healthy correction could be expected.
After such a possible pullback, more upside for altcoins is likely, particularly in their respective BTC pairs.
Crucial levels to watch for Cardano
ADA/USDT 1-day chart. Source: TradingView
The USDT chart of Cardano shows a massive vertical move, which makes it rather difficult to establish the support and resistance levels. However, several points of interest can be found based on the daily timeframe using the Fibonacci indicator and historical price action.
The first point is found around the $0.65-0.70 area, confluent with the 0.35-0.382 Fibonacci level. The next support zones are at $0.55 and $0.42-0.46 if that level doesn’t hold.
ADA/USDT 4-hour chart. Source: TradingView
The 4-hour chart for Cardano shows confluence with the 1-day chart as an area of compression is seen around the $0.70 area. This support zone is in line with the daily chart as a Fibonacci level is found in this region as well.
If this first support zone doesn’t hold as support, the next support zone is shown on the 4-hour chart. This support zone is found at $0.50-0.55.
After a correction or a test of these levels, the Fibonacci extension tool also hints at points of interest once ADA enters price discovery. If Cardano makes a renewed impulse wave, the levels to watch will be found at $1.50, $2.35 and $3.20.
Overall, the likelihood of a massive bullish year for cryptocurrencies is increasing with each day.
author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.
Title: Cardano is soaring, but can ADA gain another 380% to break its record high vs. Bitcoin?
Sourced From: cointelegraph.com/news/cardano-is-soaring-but-can-ada-gain-another-380-to-break-its-record-high-vs-bitcoin
Published Date: Sat, 13 Feb 2021 16:00:00 +0000
Marla Brooks – Financial Analysis
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