Cardano appears to have completed a clean Wave 2 correction and is now forming the first 1-2 setup within a larger impulsive move to the upside. From an Elliott Wave perspective, this suggests we are at the very beginning of a broader bullish development. Structurally, the chart aligns across multiple degrees of trend: we are currently within Cycle Wave 3, Primary Wave 1, and Intermediate Wave 3 — a highly favourable configuration for strong upside momentum.
The recent retracement reached the 0.5 Fibonacci level, where price reacted strongly and formed a well-defined bullish order block. This confluence between Fibonacci support and structural demand reinforces the idea that the local bottom is likely in place. The move off the lows also began with a clear five-wave advance, indicating that an impulsive structure is developing.
While an alternative scenario is shown on the chart — suggesting a possible deeper correction — this is considered low probability. The main reason this alternative exists is the relatively short time duration of the Wave 2 correction, which might appear shallow compared to expectations. However, given the structural symmetry, the clear order block, and the impulsive reaction from support, the primary bullish scenario remains heavily favoured.
Additional confluence comes from sentiment and derivatives data. Funding rates are still in negative territory but are turning upward, signalling a potential shift in market positioning toward longs. At the same time, open interest is increasing — an encouraging sign of growing participation and conviction in the current move.
The liquidity heatmap currently shows significant clusters both above and below the current price, making the liquidity picture overall neutral. However, this also implies potential for strong directional movement should one side be taken out decisively. Overall, the technical and sentiment-based evidence points to a structurally sound bullish setup with limited downside risk, so long as the current low remains protected.
The recent retracement reached the 0.5 Fibonacci level, where price reacted strongly and formed a well-defined bullish order block. This confluence between Fibonacci support and structural demand reinforces the idea that the local bottom is likely in place. The move off the lows also began with a clear five-wave advance, indicating that an impulsive structure is developing.
While an alternative scenario is shown on the chart — suggesting a possible deeper correction — this is considered low probability. The main reason this alternative exists is the relatively short time duration of the Wave 2 correction, which might appear shallow compared to expectations. However, given the structural symmetry, the clear order block, and the impulsive reaction from support, the primary bullish scenario remains heavily favoured.
Additional confluence comes from sentiment and derivatives data. Funding rates are still in negative territory but are turning upward, signalling a potential shift in market positioning toward longs. At the same time, open interest is increasing — an encouraging sign of growing participation and conviction in the current move.
The liquidity heatmap currently shows significant clusters both above and below the current price, making the liquidity picture overall neutral. However, this also implies potential for strong directional movement should one side be taken out decisively. Overall, the technical and sentiment-based evidence points to a structurally sound bullish setup with limited downside risk, so long as the current low remains protected.
Note
NOTE TO ALL OF MY ANALYSES:You might be wondering why prices are expected to rise — especially considering that Wave 3 is typically the most dynamic phase in an impulsive structure. One of the main reasons lies in macroeconomic conditions: for a long time, capital inflow into crypto has been limited due to the Federal Reserve (Fed) maintaining high interest rates. However, this could change at the upcoming FOMC meeting in September.
According to the CME Group’s FedWatch Tool, there is currently a 93.6% probability of a rate cut being priced in. This expectation could lead to a classic "sell-the-news" event, as markets front-run the decision. That front-running could provide fuel for Wave 3 — especially from retail participants.
Why retail?
Because institutional players have already entered. We’ve seen them form significant order blocks near the end of Wave 2, which indicates professional accumulation during peak uncertainty. This structural evidence supports the idea that the smart money is already positioned — leaving retail to push the next leg.
Have a great week & stay consistent.
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Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.