Cardano previously created an inverse head and shoulders pattern to signal that a reversal was underway. Price failed in its first attempt to break above the neckline, but another attempt appears to be in the works.

The 100 SMA is still above the longer-term 200 SMA to suggest that the path of least resistance is to the upside. In other words, resistance is more likely to break than to hold and bullish momentum is likely to persist. The 200 SMA is holding as dynamic support as well, although a break below this could encourage sellers to join in.

A move past the pattern’s neckline around the 0.0550 mark could set off a climb that’s the same height as the inverse head and shoulders, which spans 0.0250 to 0.0550. Price needs to climb past the 100 SMA to add confirmation that bulls are putting up a stronger fight from here. If the neckline continues to hold, another dip to nearby support zones may follow.

RSI is pointing up to confirm that buyers are in control of the game, but the oscillator is approaching the overbought zone to reflect exhaustion. Topping out and turning back down could bring in more bearish pressure. Stochastic is already turning south so the price could follow suit as sellers appear eager to return without seeing overbought conditions.

Cardano is on relatively better footing compared to most of its peers these days, although it was not immune to the sharp selloff in the previous week. Cardano is also awaiting an update this quarter and might see vast improvements in efficiency and transactions soon after.

The Shelley phase of the project, which follows the Byron phase, will introduce a fully decentralized network with staking and delegation. Shelley will make the platform more robust and contain more features that would likely attract more developers.

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