In a video uploaded on December 1st, 2023, the analyst behind the popular LuckSide Crypto channel shared his thoughts on the current state of the Cardano cryptocurrency. While maintaining an overall bullish outlook, he expressed some reservations about its near-term price action. His analysis shed light on the potential movements of ADA within the crypto market.
The analyst pointed out that while the crypto market as a whole has entered a “new era of bullishness” and remains in a bullish trend, Cardano (ADA) appears to be consolidating within a “very, very big bullish pennant” pattern that has been forming since November 5th. According to his observations, ADA is “nestling into this nice little cozy corner” as part of this pennant formation.
He showed a chart indicating that ADA recently retested its 20-day moving average support level, bounced upward, and continues trading above a key bullish trendline. However, with the pennant stretching on for nearly a month now, the analyst believes ADA may be close to making a definitive move either upwards or downwards to break out of this range-bound action. The question that arises is if ADA will break upwards or face a possible retracement.
The LuckSide Crypto analyst pointed to a broader flattening of capital flows into the crypto space over the past few weeks, with the total market capitalization hovering within a tight range around $1.4 trillion. In his assessment, this suggests that digital asset prices across the board have stagnated and entered sideways trading ranges, increasing the likelihood of rotating capital chasing coins with individual momentum spikes.
This stagnant situation leads to the belief that capital is circulating within the crypto space, but it remains uncertain where ADA stands in that circle. The analyst expresses his uncertainty by stating, “That’s why I’m holding my breath.” It is unclear whether ADA will be the next token to benefit from another influx of capital and breakout higher or if it will correct downwards as money rotates elsewhere.
For now, the analyst is waiting to see if positive news and sentiment, coupled with rising Bitcoin (BTC) prices, can provide enough momentum to propel ADA out of its current consolidation pattern to the upside. While entertaining the possibility of a pullback, the crypto expert maintains confidence that any near-term ADA retracements would likely be modest given current market conditions.
He does not anticipate a return to the much lower prices from over a month ago, barring an unexpected “black swan” event. The analyst remains on the bullish side of things and believes that ADA will continue moving up, not waiting around for possible corrections.
The current state of Cardano cryptocurrency is characterized by a consolidating pattern within a bullish pennant formation. The analyst’s reservations regarding near-term price action stem from the flattening of capital flows within the crypto market and ADA’s position within this circle of circulating capital. However, the analyst maintains a positive outlook and expects ADA to benefit from positive news, sentiment, and rising Bitcoin prices. Despite the possibility of modest retracements, the analyst does not anticipate a significant decline in ADA’s price. Only time will tell whether ADA will break out to the upside or experience a retracement, but the subsequent direction of ADA’s movement will undoubtedly have an impact on the overall cryptocurrency market.
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