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Cardano Failed in its Fifth Wave

CryptoRocket

The Cardano (ADA/USD) price exposes a bearish sequence after the failure of its fifth wave of Minute degree labeled in black.

The cryptocurrency Cardano against the US Dollar, in its hourly chart, exposes a complete five-wave sequence, which began on April 16th when ADA/USD found fresh buyers at 0.030593.



On the previous chart, we observe the price action running in a third extended wave, which topped at 0.054487 on April 30th. This upward impulsive movement shows the progressive subdivision in the Minuette degree in blue and Subminuette in green.

On the other hand, we distinguish the RSI oscillator moving above level 40, which reflected the support level in any retracement developed by the market.

Once Cardano completed its third wave, the market participants moved back ADA/USD beyond 38.2% of Fibonacci retracement of the wave ((iii)) identified in black. This movement suggested that the upward rally is in an exhaustion stage. In consequence, the fifth wave should fail or don't reach a significative higher high compared wit the previous high at 0.054487.

Concerning the alternation principle, we notice in the corrective waves how it worked in the bullish cycle. In the first correction corresponding to wave ((ii)) of Minute degree labeled in black, the corrective structure developed was a simple formation. In contrast, the second correction developed by the fourth wave of a Minor degree was a complex corrective formation.

At the same time, we can verify the wave analysis affirmation that establishes that the complex corrective structure will appear before or after the extended wave. In this case, due to the third wave is extended, and the second wave developed a simple correction, the fourth wave should be the complex.

After the breakout of the triangle pattern, ADA/USD developed a limited upward movement, which pierced the end of the third wave in black slightly, from where Cardano began to decline in a corrective sequence that remains in progress.

For the following trading sessions, Cardano could continue its current sideways formation, which could be a triangle pattern. On the other hand, once ADA/USD completes its wave ((b)) in black, the price action should begin a new decline as the wave ((c)), which could not extend beyond the end of wave ((a)) at 0.042731.

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Source: https://www.cryptorocket.com/news/cardano-failed-in-its-fifth-wave/
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