Cardano [ADA] & ICON [ICX] Price Action – Candles Indicate Cardano May Reverse Its Increase
Top cryptocurrency Cardano has had particularly volatile swings over the past few days price action.
Significant increases were recorded across the cryptocurrency market in general on Tuesday of this week with most major cryptocurrencies recording a double-digit appreciation on the day.
Cardano recorded a Marubozu candle on Tuesday increasing from $0.072 to $0.086.
A Marubozu indicates strong buying pressure and increases the probability that the following day will record an increase.
However, Cardano followed up with an extremely volatile day of trading with a low of $0.0525 and a high of $0.101 formed.
Price has formed an inside bar candle yesterday and is so far forming another inside bar candle today.
These inside bar candles indicate that the momentum of the upward movements seen early in the week may have been exhausted on Tuesday and Wednesday.
This increases the odds of a reversal from here.
This viewpoint is further support on the 4-hour chart where price action has been forming lower lows and lower highs.
The MACD and RSI have also been decreasing indicating increased selling pressure in recent price action.
We are also seeing lower levels of buying pressure being recorded in the cryptocurrency of the South Korean launched platform Icon.
The cryptocurrency of the platform, ICX, managed to surpass its former high on Tuesday when price increases were taking place across the market.
Wednesday’s price action followed up with some volatility where the price fell back below the point of the former high but also tested resistance at $0.422, an important level where the price broke down in November.
Price failed to stay above or below either of these levels and followed up on Thursday forming a Doji candle.
Price has continued its increase to retest $0.422 today.
It is also worth noting that a bearish divergence is forming between the price and RSI.
This is a trend reversal pattern that increases the odds that price will reverse.
It is unlikely that price will break above $0.422 on this test due to the RSI and MACD trading at significantly lower levels on the 4-hour chart than on the previous test.
The lower levels for the RSI and MACD indicate lower levels of buying pressure.
If price failed to overcome the $0.422 level when it had higher amounts of buying pressure, it means there is a far lower probability that it can overcome the level on this test.
- Two consecutive inside days forming for Cardano indicating the momentum is gone from the price increases.
- ICX is retesting the level where price broke down in November.
- Bearish divergence forming on the daily chart for ICX.
- Lower chance of the price ICX overcoming $0.422 on this test with lower levels of buying pressure being recorded.
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