Cardano (ADA): Expect a Pullback and Another Rally Soon
Cardano (ADA) has now become the 3rd largest cryptocurrency by market cap. See here. Besides, I already started covering it daily for my Premium Crypto Trading Members last week, and thus there are enough reasons to now share my work with the world. For those of you unfamiliar with my work on Bitcoin (BTC) and Ethereum (ETH), I use primarily the Elliott Wave Principle (EWP) and Technical Analyses (TA) to reliably (~70%) and accurately (+/- 10%) forecast how high and low a specific move, depending time-frame, should go. Last week on August 17, see Figure 1A below, I showed my Crypto Trading members, who are banking heavily on my calls, ADA should bottom at around $1.89 and then rally to $2.5-2.75. It reached $1.87 the next day and is now trading at $2.92. That is the power of EWP and TA combined. So what’s next for ADA?
Figure 1. ETH daily chart with EWP count and technical indicators.
After three comes four and five, that we know for certain
Thanks to the EWP, we know with certainty that after wave 3 comes a 4th and 5th wave. Just like (green), minor wave-4 and five came after minor-3 last week. See Figure 1B above. Currently, ADA is IMHO completing (Red) intermediate wave-iii of (black) major wave-5. This minor wave-5 divides (grey, minute, waves i, ii, iii, iv and v) and extends. Hence, it has already surpassed my ideal target zone ($2.50+/-0.25), but it is still within the accuracy 10% range. Clearly, and as usual, “in Bull markets, upside surprises and downside disappoints.”
At this stage, albeit not yet confirmed, the technical indicators, like the RSI5 and MFI14, are less potent now than they were at last week’s top. This setup is typical for a wave-5 of wave-iii, as the maximum strength readings are often at the 3rd of a 3rd wave high. I, therefore, expect ADA to top out soon and embark on a wave-iv correction, lasting several days, to ideally $2.25-2.55 before wave-v of wave-5 takes hold and rallies price to ideally $3.25-3.75. From there, we should then expect an even more significant correction. But, for now, let us focus on the pending (red) wave-iv and -v.
Bottom line: Cardano is now the 3rd largest cryptocurrency by market cap and has rightfully earned its separate coverage. ADA should be completing a more significant 3rd wave soon and embark on a correction to ideally around $2.25-2.55, depending on where the 3rd wave will top. After, it will most likely rally to new all-time highs again, thinking mid- to high-$3s. Hence, the pending correction should IMHO be another buying opportunity for swing traders as long as ADA does not break below $1.87.
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