Riding a 20% climb in a week's time, Cardano (ADA) is exhibiting bullish price behaviors that may indicate the breakage of bearish patterns which persisted since March of 2024.

It was only a matter of time before the necessary parameters were met to enter buying positions for not only Cardano but also other major cryptocurrencies. So, is it time to buy yet?

Daily time frame analysis

ADAUSD - 1 Day Time Frame

A fundamental element for traders to build their positions on is liquidity. The corrective move ensured the accumulation of early buy orders from market participants, including large and small speculators who placed their Stop Loss and Sell Stop orders below the support zone and the Fair Value Gap (FVG) on the 3-month time frame.

This zone, shown in blue on the chart, saw the price drop impulsively below it, providing the initial Sell-Side Liquidity selection. Consequently, commercial market participants could enter the market with buy orders, paired with the Sell Stops from other participants.

For retail traders, following the initial liquidity selection, it is crucial to wait for the price to show the next necessary parameter confirming a purchase.

In this case, there has been the formation of an Order Block (OB) on the weekly time frame, an Inversion Fair Value Gap, or a new support zone that was previously resistance, along with a Break of Internal Structure.

When to buy Cardano?

It is possible to place a covering SL order aggressively below the internal low or safely below the external low of the newly formed bullish structure. This strategy aims to progressively target the External Buy-Side Liquidity.