- Cardano price rallied 16% in a single daily candlestick on May 4, signaling a resurgence of buyers.
- Due to the Bitcoin crash, ADA has undone these gains and is back at square one, eyeing $1.
- A daily candlestick close below $0.677 will invalidate the bullish thesis.
Cardano price experienced a strong comeback from buyers, which pushed it up explosively. However, the price faced a massive resistance at a significant barrier, leading to a full 180. Going forward, investors need to be patient in observing how ADA reacts to the current support before establishing a directional bias.
Cardano price on a roller coaster
Cardano price set a range between $0.776 to $1.240 as it rallied 60% from March 7 to 29. As explained earlier, a rangebound movement is easy to spot and trade. A sweep of the limit is often followed by a move in the opposite direction to sweep the other barrier.
Although ADA rallied roughly 16% on May 4 and set a bullish precedent, this bullish setup was undone as Bitcoin price crashed down to $36,000. As a result, Cardano price undid the gains on May 4. Since the altcoin has swept the range low, there is a good chance for the next leg to be an upswing that sweeps the range high at $1.24.
However, there are quite a few hurdles that ADA needs to overcome. The first significant barrier is the $0.90 level, which is the reason for the recent crash. Clearing this will open the path for Cardano price to retest the $0.96 level which roughly coincides with the 50% retracement level at $1.01.
This is likely where the upside is capped for ADA, but in a highly bullish case, the run-up might extend to the range high at $1.24, constituting a 60% gain.
ADA/USDT 1-day chart
Although sweeping the range low at $0.776 has its perks, a failure to quickly recover above it will signal a weakness among buyers. In such a case, a daily candlestick close below the $0.677 level will create a lower low and invalidate the bullish thesis.