Cardano (ADA): The Expected Pullback Came. Rally Time?
A week and a half ago, see here, I preferred for Cardano (ADA) “… wave-b is now underway, which can target as high as $2.97-3.17 for what would then become an “irregular flat,” before (green) wave-c of (red) wave-iv brings the price back down to the ideal target zone of $2.50-2.20 once again.” Bingo. In the meantime, I had told my premium crypto trading members that a break below $2.70 would be bearish. Thus, using the Elliott Wave Principle (EWP) combined with Technical Analyses (TA), my preferred view was the correct one, and now I can look at the new pieces of the never-ending puzzle.
Figure 1. ETH daily chart with EWP count and technical indicators.
The break below $2.20 created another option
My preferred view of a larger, more complex, i.e., irregular flat 4th wave, remains, but with the drop to $2.04, I must acknowledge the possibility of another option. See Figure 1 above. I’ll get to that in a minute. As long as this week’s low holds, ADA can build on its (red) 5th wave to ideally $3.50 +/- 0.25. See Figure 1A. Namely, so far, ADA has, over the last two days, closed daily inside the ideal (red) wave-iv target zone ($2.22-2.51), at $2.51 and $2.47, respectively, and is now trying to move back above it. Closing prices are most important and thus, so far so good.
The 2nd option, shown in Figure 1B, is based on where the new uptrend started. The preferred case has the June low because the July low was a higher high (red wave-i, ii), but it is the July low in the new alternate case. The new possibility suggests the recent rally was only a 1st wave (Red wave-i in figure 1B), and Cardano is now working on (red) intermediate wave-ii. With Tuesday’s low, it follows that ADA had already retraced almost enough to get to the ideal wave-ii target zone ($2.04 vs. $1.99). Thus this option has merit and must be considered going forward. It does mean, bigger picture-wise, the 3rd wave to ideally $5.00-5.25 should soon start.
Given Cardano (ADA) has essentially done as forecasted over the last 2-3 weeks. My preferred POV remains it completed its 3rd and possibly also its 4th wave and should embark on a 5th wave to ideally the mid-$3s soon as long as this week’s low at $2.04 holds. If it does not, then -given that this week’s low was a bit lower than expected ($2.04 vs. $2.22, albeit still within the 10% error range)- it does open up the possibility that ADA is in a 1st and 2nd wave setup instead, with a 3rd wave to the $5s to commence. Regardless, both options do look for higher prices ultimately. As always, all we can do is “anticipate, monitor, and adjust.”, and as such, I constantly monitor for potential new options in this never-ending puzzle.