Over the weekend the price of Cardano has been moving sideways as it has ended its impulsive movement to the upside. Cardano was being traded around $0.0845 at Friday’s open which is also the lowest price has been as from there an increase was made to $0.09377 on the following day. Since then the price was in a minor downtrend until today when it came back to around $0.0845 the levels of the Friday’s open.
On the hourly chart, you can see that the price action formed a corrective structure after the increase ended on Wednesday and so far we have seen three consecutive corrections which could be the end of the higher degree three-wave correction. The price currently below the 0.089243 horizontal support level which was retested today after the price broke out from it on the downside. This is still a sign of bearishness but the price most likely ended its corrective structure as I’ve counted three consecutive corrections which is why today’s retest would most likely be the first wave of a minor degree impulse.
If this is true then another impulsive move to the upside would be expected from here as the trend continuation should start after the correction ended, but if the previous 5th Minuette wave ended as the last wave from the higher degree impulse, we could be seeing first signs of weakness and the top scenario. If the price continues moving to the downside below the 0.0794 horizontal level I would consider that the upswing ended and that we are to see the start of a downward motion with strong momentum as the retracement or a trend continuation should occur after the upswing ended.
Zooming out on to the 4-hour chart, you can see that my projection is a bullish one as I have counted the sub-wave of the last impulsive increase to have only 3 waves with the 4th wave currently developing. This would mean that the sideways movement we have seen over the weekend is most likely the 4th wave of a Minute impulse wave to the upside. This indicates that another higher high is to develop after the current corrective movements ends which would most likely end as an interaction with the upper horizontal resistance level at $0.113732 which is the significant support level now serving as resistance.
After the expected 5th wave ends we could have two possibilities which depend on the nature of the seen increase. Looking at the daily chart, you can see that from 15th of December when the first impulsive increase started until now we have seen the development of the three-wave structure. This could be the ABC correction to the upside after the price of Cardano experienced a long downtrend in which it lost around 92% of its valuation as it fell from $0.3785 to $0.028557.
If this is true than after the current upward movements end we are going to see the start of the trend continuation to the downside as the correction ended.
The other possibility would be that from 15th of December an impulsive five-wave started in which case after the current upward movement ends two more waves should develop – 4th wave to the downside and finally the last one to the upside which would surpass the now projected ending point of the Minute 5th wave at $0.113732.