Cardano has surged nearly 25% over the past week. Bullish momentum is building ahead of Cardano’s Vasil hard fork. Nonetheless, technical indicators suggest that ADA may retrace before setting new local highs.
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Profit-taking appears set for Cardano as it struggles to break stubborn resistance. Nonetheless, any possible corrections are likely to be short-lived as speculation mounts over the upcoming Vasil hard fork.
Cardano meets rigid resistance
Cardano appears to be enjoying significant bullish momentum as the network approaches the expected Vasil hard fork.
IOHK, the development company behind Cardano, has revealed that it has successfully delivered a new node version for the upcoming upgrade. As the final testing process progresses, the development team is evaluating whether to release Vasil on the Cardano testnet. The goal is to “ensure that any changes do not adversely affect the functionality of dApps already running on the network.”
ADA is up nearly 25% in the past week as it enters its final phase before the hard fork. It rose from a low of $0.54 on June 3 to a high of $0.66 yesterday. Now, Cardano seems likely to undergo a brief correction before resuming its uptrend.
On the 12-hour chart, the 100-hour moving average could act as a hard resistance, preventing ADA from rising further. Meanwhile, the Tom DeMark (TD) Sequential Indicator presents a sell signal in the form of a green nine candlestick. The bearish pattern is expected to see a one to four candlestick correction.
A surge in sell orders that pushed Cardano below $0.63 could be the first sign to validate this bearish thesis. A break below such an important support level could encourage investors to book profits, adding to the downward pressure. If this happens, ADA could fall by a further 10% to $0.55.
While the odds appear to favor the bears, Cardano will have a chance to invalidate the bearish outlook through the 100 hourly moving average. Above this level and printing a 12-hour candlestick close above $0.69 could lead to higher highs, pushing ADA towards $0.82.
Disclosure: At the time of writing, the author of this article owns BTC and ETH.
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