Bitcoin has been underperforming in the market over the past few weeks. On watching the cryptocurrency markets closely, a new paradigm is spotted to be emerging. Bitcoin is losing steam. At the same time, other crypto tokens are bottoming out. One coin that has grabbed everyone’s attention is Cardano.
Cardano is one of the most fundamentally sound cryptocurrencies. However, it doesn’t make sense that the cryptocurrency (ADA/BTC) dropped to as low as 0.00000524 on July 16. At that point, the crypto token lost over 94 percent from the all-time high of 0.00008788. Yet, the cryptocurrency dubbed by some as the “Ethereum Killer” appears to be carving a bottom. It is actually trading at a level where it can create a new base and massively pump.
A quick look at the weekly chart shows that Cardano is trading close to historic lows of 0.0000057. Even though bears were able to take out this level on July 16, bulls quickly responded and pushed the price above the support on July 17. The brief breach of the support can now be interpreted as a bear trap. In addition to that, the volume on June 24 was significantly elevated. This can be seen as the capitulation volume. In other words, many dumped their Cardano positions in favor of bitcoin because they’ve lost hope in the market.
If you look at the chart of the psychology of a market cycle, you will see how Cardano has entered a period of depression. Sure, it can still go lower but if this is the bottom, then those who buy now will be able to maximize their profits. Keeping that in mind, this would be the best time to invest in Cardona.
Investors who agree with our analysis might want to buy as close to 0.0000057 as possible. If bulls hold the support, the immediate target is 0.00001255. Cardano may still look bearish so consider placing a tight stop below fresh lows of 0.00000524. This way, you stand to gain over 120 percent and risk about 8 percent which is a very good risk-to-reward ratio.