Cardano [ADA] Created a bullish breakout – are short sellers held back?

Disclaimer: The information presented does not constitute financial, investment, trading or other type of advice and is solely the opinion of the author

ADA has formed a descending channel pattern since mid-February. The ADA records significant whale activity.

Cardano [ADA] It has depreciated since mid-February, forming a downward channel. But it bounced back despite the overwhelmingly bearish sentiment as the market headed toward Friday’s (March 10) U.S. jobs report.

Read Cardano [ADA] Price Forecast 2023-24

Price action dipped below $0.3000 before a strong rally broke out of the descending channel on Friday.A pullback retest of the breakout level could present fresh buying opportunities if Bitcoin emerges [BTC] Defending support at $20,000.

Will the recovery continue?

Source: ADA/USDT

ADA retested the upper bound of the channel twice before creating a bullish breakout and clearing the 26-period EMA (exponential moving average) at $0.3165. But the bulls’ efforts are blocked by the 50-period SMA at $0.3235.

A retest of the pullback and subsequent bounce off the upper channel can confirm a sustained recovery. Therefore, if BTC does not fall below $20,000, near-term bulls may take action and target the 50 period EMA or $0.3300.

A pullback into the descending channel will invalidate the aforementioned move. If BTC falls below $20,000, confirmation of further declines could provide shorting opportunities at the mid-level of the $0.3101 channel ($0.3030) or in extreme cases at $0.2893.

The RSI retreated from oversold territory and balanced out, showing strong buying pressure on March 10. However, it has faced several rejections at the midline in the past and could face another rejection if the trend repeats itself.

On the other hand, OBV is also trending up, which could provide leverage to the bulls if it crosses the 15B level.

ADA records significant whale activity

Source: Santiment

Despite the bearish sentiment across the market on March 10, the sentiment for ADA remains Optimism. Despite a slight dip in sentiment, sentiment remains Optimism as a large number of whales have accumulated ADA at a discount.

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The supply distribution reveals two major whales accumulating on March 10th; 100M – 1B token holders and 1M – 10M token holders. However, the dominant category holding 10-100 million tokens distributed its holdings.

Therefore, if the initial two whale categories continue to accumulate, the recovery may continue. But a BTC drop below $20,000 could derail the strong recovery.

Source: Santiment

Information source: compiled from AMBCRYPTO by 0x information.Copyright belongs to the author, without permission, may not be reproduced

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