Crypto analyst Michaël van de Poppe is looking at Cardano, which has surged a staggering 116% over the past 30 days and 2,400% in one year, according to CoinGecko.
Van de Poppe says there’s now a “massive” chance that Cardano will retrace significantly after its epic breakout.
“If you want to buy Cardano right now, the chances of a significant drop and drawdown on your entry based on the daily time frame is massive. This means that it can easily correct 25-30% and still be bullish. But you have been going down 25%, while potentially a better entry is granted on those lower levels.”
At the time of writing, Cardano is trading at slightly below $3.00 and Van de Poppe says he would prefer buying at or below $2.45 since such an entry point offers a better risk-reward ratio.
“The actual pain is on the downside. Doesn’t mean that Cardano can’t keep on running. It can. But you have to wait or look for levels that are interesting to watch in order to actually take the entry…
I would be looking around $2.45 and second, I would be looking around the area that we have around $2.”
Van de Poppe says that the target zones for profit taking are at or above $4.40.
“What is the next target zone for Cardano based on the impulse waves? Well, obviously you can use the Fibonacci extension based on the previous impulse wave, through which you can target $4.75 and $6.80. You can also do it based on the recent run, and then you get to $4.40 and $6.50.”
The analyst says that signs of a retracement for the third-largest cryptocurrency by market cap are also evident on the Cardano/Bitcoin (ADA/BTC) chart.
“Is Cardano done with running at this point? I don’t believe that it is. But it shows that we might be getting such a corrective move at this point, given the fact that also the daily [time frame] on the Bitcoin pair [ADA/BTC] is not really granting any strength at all. So the scenario that we have here is showing us a potential corrective move.”
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