- Cardano price action continues to constrict near the $1.30 support zone in a tight range.
- Strong buy signal now present on the $0.02/3-box reversal Point and Figure chart.
- Downside risks exist and could be substantial if bears take over.
Cardano price action continues to struggle to make any headway to higher valuations. ADA has spent 19 weeks in a downtrend from the most recent all-time highs made in September 2021. However, bullish momentum may return very soon.
Cardano price develops buying opportunity before ADA hits $2.20
Cardano price has a very bullish entry setup on its Point and Figure chart. The long setup is a theoretical buy stop order at $1.42, a stop loss at $1.34, and a profit target at $2.20. The long idea represents a 9.75:1 reward/risk with an implied 56% gain from the entry.
The long idea is predicated on the entry simultaneously confirming the breakout above a triple-top and crossing above the bear market trendline to convert Cardano price into a bull market.
ADA/USD $0.02/3-box Reversal Point and Figure Chart
The long entry setup is invalidated if Cardano moves to $1.22.
There is a short setup on Cardano’s chart as well. The short idea is a hypothetical sell stop at $1.28, a stop loss at $1.36, and a profit target at $1.00. However, short-sellers should be extremely cautious about this setup.
ADA/USD $0.02/3-box Reversal Point and Figure Chart
It is very likely that Cardano price could trigger the sell stop only to fall no lower than $1.24, setting up a massive bear trap for short-sellers. Additionally, the profit target is on the critical $1.00 value area and likely to be defended above $1.00.
The short idea is invalidated if Cardano price moves above $1.46.
