Cardano, Cryptocurrency, News, Price Analysis

How to Short Cardano’s (ADA) FOMC-Driven Rally?

  • ADA has its price forming a bearish divergence, confirming potential retracement.
  • The alternative token might record a 15% drop.
  • A daily candle closing beyond $0.550 will cancel this bearish narrative.

Cardano price seems ready for a U-turn following 27 July’s rally, with indicators displaying visible trend reversals. Market players should wait for authorization before executing shorts for ADA. The broad market seems to cool after the latest FOMC-driven surges, readying for declines.

Cardano Awaits Bearish Reversal

The previous day saw ADA price surging about 15% to print a lower peak at $0.519. The surge came after the Federal Reserve hiked interest rates by 75 basis points. The announcement triggered buying pressure surges for BTC and enormous uptrends for alternative tokens, including ADA.

Nevertheless, the bullish move could mean a forewarning of bearishness for the Cardano price. The swing peaks printed on 23 July and 28 July represent lower highs, whereas the RSI (Relative Strength Index) has created a higher high. That translates to a bearish divergence and predicts reversals in Cardano’s latest rally.

Market Makers and ADA’s Concealed Agenda

As the technicals suggest reversals for ADA’s latest rally, the fractal setup supports this thesis. Cardano printed a swing low near $0.435 on 13 June before sweeping the low on 18 June, catalyzing a 25% surge. This liquidity run saw the Relative Strength Index digging beneath the oversold region.

Similar actions emerged for the $0.435 swing low of 30 June, swept for any liquidity on 13 July. The 13 July liquidity run also had the Relative Strength Index entering the oversold region. Meanwhile, investors can expect retracement from ADA.

That would see ADA not only retesting the support level at $0.472 but shattering it to explore the $0.435 mark again. That would sweep the $0.450 26 July swing low and possibly push the Relative Strength Index into the oversold region. Meanwhile, investors might play this development in two ways:

  • Shorting the move towards $0.435
  • Wait for a fractal formation to emerge and long Cardano after$0.450 sweep or $0.435 retest.

Meanwhile, extended bullish momentum might invalidate ADA short opportunity highlighted above. A daily candle closing beyond $0.550 would cancel the bearish narrative. That could see ADA revisiting the hurdle at $0.628.

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