ADAUSD Long-term Trend and Price Confluence to Fibonacci Circles
The blue ascending parallel channel starts resonating with the price since all the way back in Mar 2020 could give ADA support as long as it stays within it.
Notice how I've placed the bottom of this channel above the price in Jul-Aug 2021 to denote it was acting as resistance and in doing so, the mid-line of the channel is more in confluence with the price all along than not, acting as support and resistance at different times. The same applies to Feb-Mar 2021 when the top of the channel was support; or depending on how you look at it, the price was attempting to break out of it.
A parallel channels are easy to draw and in minor timeframes they could act as continuation patterns that theoretically take the price in opposite direction to the channel itself.
But in the long-term, the price can return to the channel, partially also because long-term parallel channels cover a large area with price-time probabilities.
The same applies to the Fibonacci circles (in black) that the price could be in confluence to not just levels, but time too while Fib retracement levels would give you only levels, but I do agree they're very useful too. Neither Fib circles nor channels give you exact price targets but, areas and also points of time in which the price can face significant supports and resistances, or break-outs.
ADA is in the region of the bottom of the blue long-term parallel channel that, holding above it would still be bullish in the large timeframes. Currently, that's at 2.2-2.4 USD and if ADA bounce off quickly from this region, the probability to the upside with a mid-term trend reversal increases, until proven otherwise (better with retests of course). Falling out of this channel for a substantial amount of time (weeks or months) could present an opportunity to trade away from it OR trade into the channel in the future, into a new-old trend to ride on with a tight-stop loss, higher reward for lower risk.
Note: Indicators belonging to large timeframes covering large areas have their levels/supports/resistances in 'regions' rather than what a 'line' could project. A line is there for you to get an idea of it unless you're scalping in a 5-minute timeframe to the dot. If your strategy is long-term, you are better off with 'confirmation' of continuations, breakouts, reversals etc. via retests, more-macro time-frame candle-closes, and major Fib-levels, in determining probabilities of price direction.
Notice how I've placed the bottom of this channel above the price in Jul-Aug 2021 to denote it was acting as resistance and in doing so, the mid-line of the channel is more in confluence with the price all along than not, acting as support and resistance at different times. The same applies to Feb-Mar 2021 when the top of the channel was support; or depending on how you look at it, the price was attempting to break out of it.
A parallel channels are easy to draw and in minor timeframes they could act as continuation patterns that theoretically take the price in opposite direction to the channel itself.
But in the long-term, the price can return to the channel, partially also because long-term parallel channels cover a large area with price-time probabilities.
The same applies to the Fibonacci circles (in black) that the price could be in confluence to not just levels, but time too while Fib retracement levels would give you only levels, but I do agree they're very useful too. Neither Fib circles nor channels give you exact price targets but, areas and also points of time in which the price can face significant supports and resistances, or break-outs.
ADA is in the region of the bottom of the blue long-term parallel channel that, holding above it would still be bullish in the large timeframes. Currently, that's at 2.2-2.4 USD and if ADA bounce off quickly from this region, the probability to the upside with a mid-term trend reversal increases, until proven otherwise (better with retests of course). Falling out of this channel for a substantial amount of time (weeks or months) could present an opportunity to trade away from it OR trade into the channel in the future, into a new-old trend to ride on with a tight-stop loss, higher reward for lower risk.
Note: Indicators belonging to large timeframes covering large areas have their levels/supports/resistances in 'regions' rather than what a 'line' could project. A line is there for you to get an idea of it unless you're scalping in a 5-minute timeframe to the dot. If your strategy is long-term, you are better off with 'confirmation' of continuations, breakouts, reversals etc. via retests, more-macro time-frame candle-closes, and major Fib-levels, in determining probabilities of price direction.
Feragatname
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