Tips on Head & Shoulders Formations — Cardano! (ADA/BTC)
Hi friends! Welcome to this update analysis on Cardano! Let's get it! Looking at the four hour chart, you can see that ADA/BTC has surpassed the original head and shoulders target that I gave, back on 2/15. Now, Cardano is continuing to head lower, in the direction of my second head and shoulders target. The second target, at about 1683, represents a retracement of the full potential of the head and shoulders pattern.
When I first published this pattern as a head and shoulders, I got the normal objection from a lot of people. They were saying that it wasn't symmetrical, that it didn't break down immediately, that it wasn't a head and shoulders pattern, and so many other things. Obviously, they were wrong. Now, if you're one of the people who may have overlooked this pattern as a head and shoulders, here is the takeaway:
1. A head and shoulders doesn't have to maintain any standard of symmetry. It just needs to reflect the general formation.
2. Head and shoulders patterns do not need to break down immediately. The breakdown can often be extended, into a series of other head and shoulders patterns, or some form of a sideways consolidation or a downtrend.
3. I knew that this was a head and shoulders formation, because of other more symmetrical head and shoulders formations that were created at the exact same time, on different charts. So, relevant comparisons can help to guide you in your analyses.
Currently, ADA/BTC is testing support on the 78.6% retrace. If the 786 is lost, the second target is very likely to be reached. However, on the MACD, we can see that a bullish divergence has materialized. Over the past couple of weeks, Cardano's price action has been making lower lows, while the momentum indicator has been making higher lows. This is telling us that the underlying sell-side momentum is declining, so a continuation in downside price movement may not be sustainable for very long. Furthermore, the MACD is currently working over a weak bullish crossover, but momentum appears to be rolling over, as price continues to test the 786. With that said, I'm not personally interested in shorting this, because the downside appears to be limited. I'm more interested in buying a strong rally, that produces a higher high, and gets above some of the key overhead resistance levels, such as the 3095 area. This has been your not-so-humble market wizard, droppin' knowledge like bombs in this place! Please follow, comment, like, and share on social media. Good luck trading everyone!
***This information is not a recommendation to buy or sell. It is to be used for educational purposes only.***
-Magic loves you-
-JD-
When I first published this pattern as a head and shoulders, I got the normal objection from a lot of people. They were saying that it wasn't symmetrical, that it didn't break down immediately, that it wasn't a head and shoulders pattern, and so many other things. Obviously, they were wrong. Now, if you're one of the people who may have overlooked this pattern as a head and shoulders, here is the takeaway:
1. A head and shoulders doesn't have to maintain any standard of symmetry. It just needs to reflect the general formation.
2. Head and shoulders patterns do not need to break down immediately. The breakdown can often be extended, into a series of other head and shoulders patterns, or some form of a sideways consolidation or a downtrend.
3. I knew that this was a head and shoulders formation, because of other more symmetrical head and shoulders formations that were created at the exact same time, on different charts. So, relevant comparisons can help to guide you in your analyses.
Currently, ADA/BTC is testing support on the 78.6% retrace. If the 786 is lost, the second target is very likely to be reached. However, on the MACD, we can see that a bullish divergence has materialized. Over the past couple of weeks, Cardano's price action has been making lower lows, while the momentum indicator has been making higher lows. This is telling us that the underlying sell-side momentum is declining, so a continuation in downside price movement may not be sustainable for very long. Furthermore, the MACD is currently working over a weak bullish crossover, but momentum appears to be rolling over, as price continues to test the 786. With that said, I'm not personally interested in shorting this, because the downside appears to be limited. I'm more interested in buying a strong rally, that produces a higher high, and gets above some of the key overhead resistance levels, such as the 3095 area. This has been your not-so-humble market wizard, droppin' knowledge like bombs in this place! Please follow, comment, like, and share on social media. Good luck trading everyone!
***This information is not a recommendation to buy or sell. It is to be used for educational purposes only.***
-Magic loves you-
-JD-
Komen:
Original head and shoulders call:
