- Strong bullish structure is visible on weekly, daily, and 4-hour charts, with higher highs and higher lows
- A critical supply zone above liquidity on the 1-hour chart could offer a shorting opportunity
- Risk warning: Price reactions are unpredictable, and traders must exercise caution in zones with high liquidity
When we zoom out and examine Cardano (ADA) on the weekly timeframe, the bullish structure becomes evident. Higher highs and higher lows dominate the chart, painting a clear picture of an upward trajectory.
It’s the same story on the daily timeframe—consistently climbing with no signs of significant weakness.
The 4-hour chart reinforces this bullish sentiment, echoing the same trend of rising highs and lows.
But let’s take a closer look. Drop down to the 1-hour chart, and things change.
Despite the strong structure on the higher timeframes, there’s an intriguing opportunity to explore—a potential short around a supply zone resting just above a pool of liquidity.
Why Are Supply Zones Above Liquidity Important?
If you’ve been following my analyses, you’ll know how much weight I give to these zones. But if you’re new here, let me break it down for you.
Supply zones above liquidity are critical because they represent areas where smart money, such as institutions, might step in to push prices lower. These zones often attract liquidity in the form of stop-losses or pending orders, creating the perfect conditions for price to reverse.
The Current Scenario
Right now, Cardano is sitting within a supply zone. Could this lead to a reaction? Definitely.
However, here’s where it gets tricky: there’s a significant amount of liquidity resting above this zone. That’s what makes initiating a short position risky.
It’s like swimming against a current—you could succeed, but the odds are stacked against you.
The Unpredictability of Markets
At the end of the day, no one—no matter how skilled—can predict market movements with 100% certainty. While the scenarios I’ve outlined are possible, they’re not guaranteed.
Price can be unpredictable and may take an entirely different route.
Final Thoughts
Use this analysis as an informational guide, not as financial advice.
The higher timeframes suggest bullish momentum, but the 1-hour chart hints at a potential short opportunity in a supply zone. The ultimate direction? That’s up to the market to decide.
Remember: The information provided in this article is for informational and educational purposes only and does not constitute financial, investment, or trading advice. Any actions you take based on the information provided are solely at your own risk.
We are not responsible for any financial losses, damages, or consequences resulting from your use of this content. Always conduct your own research and consult a qualified financial advisor before making any investment decisions.
