- Cardano has rallied 7% after a sharp sell-off post-US CPI data release.
- The Relative Strength Index shows ADA in extremely oversold territory.
- The countertrend bounce could be continued, but it is highly risky.
Cardano price has rallied 7% after a sharp sell-off Thursday morning. Key levels have been defined to determine the next outcome for the smart contract token.
Cardano price shows volatility
Cardano price is currently up 7% after tagging a low of $0.35 for the first time in 2022 on Thursday morning. The recent US Consumer Price Index (CPI) data release prompted the sell-off and increased selling pressure on nearly all crypto assets. Shortly after the decline, a short squeeze took place, wiping out the liquidity of day trading bears.
Cardano price currently auctions at $0.37. The Relative Strength Index tagged historically oversold levels, which justified early bulls to jump at the discounted ADA price. An influx of volume is also spotted amidst the counter-trend rally.
Will the bulls continue to hold onto their positions or sell it for a quick buck?
ADA/USDT 8-Hour Chart
Cardano price can continue rallying higher, as the $0.40 level shows a congestion zone as a likely target for the early bulls. Still, due to the sharp decline and oversold readings, entering for a long may be extremely risky. A further decline towards $0.35 and $0.32 stands a high chance of occurring.
Invalidation of the bearish thesis is a breach above Sunday’s high at $0.43. If the bulls can hurdle this level, an additional rally toward previous monthly highs at $0.55 is a possible scenario. Such a move would result in a 45% increase from the current Cardano price.
In the following video, our analysts deep dive into the price action of Cardano, analyzing key levels of interest in the market. -FXStreet Team
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