Cardano (ADA) is expected to proceed with the first incentivized testnet, beginning with a snapshot of current positions in the Daedalus wallets (Cardano’s wallet). The incentivized testnet is easily one of the most important and significant events in Cardano’s development. The incentivized testnet is widely regarded as the biggest hurdle that must be undertaken before a full release of Cardano’s truly decentralized and self-scaling network. While the testnet is one of the most bullish events, price action has remained unchanged.
Cardano’s (ADA) Daily Ichimoku Chart
Cardano’s (ADA) daily chart shows extremely muted and congested trading. When I trade the Ichimoku system, and if the daily chart is the longest time frame I am using, the first condition I always look for is where price is in relation to the Cloud. If price is inside the Cloud, I skip the instrument. The Cloud represents volatility and indecision. I call trading an instrument inside the Cloud: “A place where trading accounts go to die.” If there is one thing that the Ichimoku system does better than any other system, it tells us when not to trade. In a couple of days, the congestion will be even more profound because price, the Tenkan-Sen and the Kijun-Sen will be inside the Cloud. For sixteen days, Cardano has been trading in this increasingly constricting range. The primary condition that prevents a breakout higher is the presence of Senkou Span B (top of the Cloud). Senkou Span B is the most challenging level for price to cross. The difficulty of crossing Senkou Span B is exacerbated if Senkou Span B has spent a long period of time in a flat condition – which is precisely what we see on Cardano’s current chart. We don’t see a change in the relative flatness of Senkou Span B until December 5th, 2019.
We should also observe that the next ten trading days show the Cloud becoming thicker, with the thickest part of the cloud occurring on November 19th. This would also bring the Chikou Span very near to being inside the Cloud as well. If we see price, the Tenkan-Sen, Kijun-Sen and Chikou Span all inside the Cloud on a daily chart, this is the ultimate squeeze play. It is a horrible condition for people who are short term traders, but it represents a fantastic breakout trade opportunity for people who trade both sides of a market. Traders should be wary of any condition on Cardano’s chart where both price and the Chikou Span have broken out of the cloud (above or below). I am anticipating a break higher given the seasonality and length of time that Cardano has spent in its current bear market. At the same time, I won’t be upset if prices do drop a considerable amount. I look at any deep drop in any cryptocurrencies that I hodl for an extended period, an excellent buying opportunity, like a sale or a discount. Be on the lookout for any growth in the daily volume over the next ten trading days. Any slight rise in daily volume over even a few consecutive trading days should be an early warning that a big move is about to occur.