A popular crypto analyst is highlighting a key price level that smart contract platform Cardano (ADA) needs to surpass in order to go on another run to the upside.
In a new strategy session, Benjamin Cowen tells his 721,000 subscribers that Ethereum (ETH) challenger Cardano has spent a lot of time hovering around $1.20 as both support and resistance over the past year.
He thinks the altcoin might need leading crypto asset Bitcoin (BTC) to also rise to help fuel another rally for ADA.
“If we come up to that level, the $1.20 threshold, I think that’s going to be a fairly big test for ADA.
It’s certainly not a test it has to battle by itself. Clearly, it’s going to be dependent on whether Bitcoin is successful in breaking its own bull market support band.”
Bitcoin’s bull market support band is a technical indicator that combines BTC’s 20-week simple moving average (SMA) and 21-week exponential moving average (EMA).
The chart guru indicates the $45,000 to $46,000 range as BTC’s next major test.
“If Bitcoin is successful in breaking through, then the argument would be that there’s a good chance that ADA would also likely be successful in breaking through.
However, if Bitcoin is brutally rejected from its bull market support band around $45k to $46k, the general expectation that I would have is that ADA would see some resistance here and rejection off of its own bull market support band.
When we’re at this phase of the market, we are fighting an uphill battle… This is the line in the sand.”
Cowen concludes by saying that altcoins in general often do poorly against the BTC trading pair when Bitcoin remains below its bull market support band.
“Bitcoin has been below it since the week of November 29th [of 2021]. If you go look at the Bitcoin/ADA evaluation since November 29th, it hasn’t really done anything that spectacular.
It was already below its own bull market support band, and since then it came down, went up to its bull market support band, got rejected off of it and then back down.
Perhaps we’re going up for another test of it at around 2,500 or 2,600 satoshis [between $1.07 and $1.11].”
At time of writing, Cardano is up 12.90% and priced at $1.10, while Bitcoin is trading sideways at $42,897.
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