Cardano (ADA) To Hit $5? Probably
– Today’s analysis utilizes Elliot Wave Theory
– Elliot Wave Theory is helpful for determining trend and projecting future price levels.
Cardano (ADA) Weekly Chart Elliot Wave Analysis
Above: Cardano (ADAUSD) Weekly Chart
I’ve targeted Cardano quite a bit over the past two days: writing one article about it yesterday and doing a video on it today. Today’s article is an expansion of that material. You’ll notice on the chart above that I’ve drawn out what I perceive to be the correct Elliot Wave structure for Cardano. I’ve had many requests to do some Elliot Wave analysis over cryptocurrencies, but I’ve mostly stayed away from it. Why? Because Elliot Wave is one of the ‘buzz word/buzz trading styles’ that is fashion these days. If you want to know a topic that no one agrees on and will always fight over, it’s Elliot Wave theory. You want to see a bunch of traders argue about how wrong and right they are, have a discussion on Elliot Wave. Is my interpretation of Cardano’s chart the correct Elliot Wave application? No idea. But it is for me.
The horizontal lines you see on the chart are Fibonacci Extensions drawn off of two key swings. The blue lines are from the bottom of the Covid-19 crash to Wave 1 and then to the bottom of Wave 2 in the primary impulse wave (thick black trendlines with large circle numbers). The green and second set of horizontal lines is from the same primary impulse wave: starts at 2 then to 3 and to 4. You will observe that the 141.4% Fibonacci Extension (blue) has acted as Cardano’s primary resistance level. The current weekly candlestick is one heck of a bullish engulfing candlestick, so unless something drastic changes to the downside, the engulfing candlestick is a massive sign to get long and stay long. But then that begs the question: how high will it go? Take a look at where number 5 is at. 5 is right on the 50% Fibonacci Extension (green) at a price level of 4.311. Above 5 is the 200% Fibonacci Extension (blue) at 5.04 and below 5 is the 38.2% Fibonacci Extension (green) at 3.01.
Humans love whole numbers. The more immediate level we should see as a near term high would be the obvious $3 range – but that particular extension level is not that powerful. The $5 at the 200% extension is more likely. Now, both numbers may seem unlikely. But remember something: this is cryptocurrency. Cryptocurrencies can run higher and higher into price ranges you never thought possible. It may very well be that Cardano at $5 is cheap. Heck, Cardano has to get to near $20 to match Ethereum’s market cap, so if Cardano is the Ethereum killer, $5 is pretty darn cheap. But let me throw this at you: the Mirrored Proportional Extension – which is fancy speak for double the all-high. Double the all-time high for Cardano is around the $3 range. That makes sense if you look at Cardano with a linear chart – but Cardano is not an instrument you use a linear chart to measure price. With Cardano, you use a logarithmic chart (proportion). So how high would Cardano have to get to match its all-time high as a proportional/equal move on a logarithmic chart? $148.
Ya, $148 for Cardano seems out of this world, but for years people have said Bitcoin would never reach a certain price and it continues to drive higher and higher. Cardano will, too.