Above: Cardano (ADAUSD)
On Friday’s (July thirtieth, 2021) evaluation, I targeted on Cardano and a number of the bearish patterns and setups forward. Because the market transitioned into Monday and a brand new month, I observed little sort of blip on Cardano’s month-to-month chart. There’s a crimson horiztonal ray on the Composite Index – observe the place it ends (to the left) after which have a look at the candlestick for that interval. The month-to-month candlestick for that interval is December 2020. Now look to the place the Composite Index is at present buying and selling and relate that to the present value degree. Discover something? Costs have moved increased and closed increased between December 2020 and July 2020 however within the Composite Index July 2020 is decrease than December 2020. This can be a situation often known as hidden bullish divergence. I’ve been preaching and writing advert nauseum in regards to the hidden bearish divergence that exists on the each day charts – however Cardano has failed to reply to that. This hidden bullish divergence is a large big deal for the bulls as a result of hidden bullish divergence is a warning that the current draw back transfer is prone to terminate, and the broader bullish transfer will very quickly resume. The place would it not go? Conservatively, the subsequent zone (gentle blue shaded space) can be the confluence of two Fibonacci Extensions between $5.30 (50% Fibonacci Extension) and $5.75 (23.6% Fibonacci Extension). The non-conservative kind-of-insane-but-still-realistic-level (gentle purple/lavender shaded space) can be the confluence of the 261.8% Fibonacci Extension at $8.33 and the 61.8% Fibonacci Extension at $8.02.
Above: Polygon (MATICUSD)
Fast notice: Polygon remains to be so new there’s not sufficient information to make use of the month-to-month chart for this evaluation, as a substitute, I’m utilizing the 3-week chart.
Earlier than we get into the doubtless bullish return of Polygon (MATIC), can we simply level out what sort of candlestick printed on the 3-week chart? That candlestick, my buddies, is a uncommon one and that it confirmed up on the 3-week chart may be very telling. That candlestick is named a dragonfly doji (I believe I incorrectly referenced it as a headstone doji in todays video). The dragonfly doji candlestick is uncommon by its very nature as a result of it requires the open and near be almost similar – it’s exceptionally uncommon to see one on a very long time body just like the 3-week chart. The best way that we interpret a dragonfly doji relies on how the market was buying and selling previous to its look. If a dragonfly doji seems after a draw back transfer, it’s interpreted as bullish and might be a precursor to upwards motion. In the event you have a look at the flat black trendline on the Composite Index, and examine these troughs towards their corresponding candlesticks, you’ll discover the identical situation is current on Polygon’s 3-week chart that’s current on Cardano’s month-to-month chart: hidden bullish divergence. Assuming that we might start both the fifth or third leg of an Elliot Impulse Wave, a possible degree can be between two Fibonacci Extensions – the 50% Fibonacci Extension at $8.16 and the 100% Fibonacci Extension at $6.26.