ADAUSD: The case for one dollar Cardano

27 déc. 2023

This is an Elliott Wave analysis of the ADA token of the Cardano project.

Many supporters of the project hype fantastical prices for the coin in the next year or two. I have heard prices of $1, $10, $11, even $32. What is realistic?

The Elliott wave principle provides tools for forecasting, based on the existing price record.
The first step is the identification of Elliott waves in the appropriate wave degrees.

This shows the existing record from this years market bottom. Accordingly, the coin has completed waves one, two, three, and four of the current advance, and appears to be entering wave five for the final leg of this wave.

Of course there is no way to know just how far the fifth wave may grow, but given the large extension of the third wave, it appears within the realm of possibility to reach one US dollar in the foreseeable future.

Growth beyond that would require substantial correction in a second wave, before anymore appreciation could be expected.

27 déc. 2023

Note

This pair is making good progress along the suggested path.
It has clearly exited the triangle correction and form a first and second wave, which permits us to estimate goals for the third wave in progress.
The 162% extension falls at about 67 cents, easily in reach in just hours. He 262% extension is at 73 cents.

28 déc. 2023

Note

First target reached.

Within hours the fifth wave of this market reach one of the anticipated targets at the 1.618 Fibonacci extension of wave one.

Notice the significance of the lower Fib levels during the ascent.

But the market appears to be hunting levels higher.

28 déc. 2023

Note

ADAUSD finished the third wave with a blow-off top just above our first target, exiting the regression channel that guided the ascent.
A third wave is always followed by correction in wave four. This took the price back a bit overnight, but this is as expected. If you stayed in the trade, hold on because the fifth wave will print a new top. Our target should be somewhere around 70 cents.

28 déc. 2023

Note

The correction in wave four was a complete ABC wave, but triangles are also made up of threes. Moreover, wave two was a sharp structure, so we may expect the guidance of alternation to kick in, and be on the lookout for a triangle. No guarantee for either.

28 déc. 2023

Note

The retracement was very deep, and ended right on the line of invalidation of the entire impulse. The market needs to hold the red dashed line. Otherwise we have to find a different wave count.
Also noteworthy is the fact that the advance stopped short of the year’s high by only $0.002. So this could have just been another corrective wave.
We are at bitcoins mercy probably, as its retracement is also deep. Large short positions are reported.

30 déc. 2023

Note

Now that the market has shown us that the correction was not over yet and my wave assignment was wrong, here is another attempt.

The rally yesterday turns out to be just an ABC leg of the triangle. D waves can be vicious, and that’s exactly what happened.

The triangle in this chart is quite different. Indeed non-Elliott wave traders would not call it that. This also required relabeling the entire leg up leading to the market top.

30 déc. 2023

Note

Here is the new chart for the entire wave:

30 déc. 2023

Note

There are several ways one could divide the run from 23.7 cents to 68 cents into a five subwaves. I have shown two now. The lead chart was started some time ago during the middle portion of the run, when the price was about 40 cents, after exit from the triangle structure.
Then, I assigned it as a fourth wave, because it is rare that a true EWT triangle occurs in wave two. It more often is a combination wave in wave two.
In my new assignment, I do think it is a two, because the top of the run works out better. But this is more or less a judgement call of which is what wave degree. The end result seems similar or identical. This coin should hit one dollar with a break out by bitcoin.