Cardano (ADA/USDT) Trading Strategy for July 31, 2025

Market Context: ADA/USDT is showing bullish momentum, trading around $0.75-$0.80 with recent consolidation after a 40% surge in the past month. Key support lies at $0.72, with resistance at $0.82-$0.85. The market sentiment is neutral to bullish, with whale accumulation and DeFi activity signaling potential upside.

Strategy: Swing Trading with Breakout Confirmation

Entry Point:

Buy Zone: Enter a long position if ADA/USDT breaks above $0.82 with strong volume, confirming a breakout from the current consolidation. Alternatively, buy on a pullback to the $0.72-$0.75 support zone, where the 20-day SMA aligns.

Confirmation: Use a 4-hour chart to confirm the breakout with a close above $0.82 or a bounce from support with a bullish candlestick (e.g., hammer or engulfing).

Stop-Loss:

Set a stop-loss below $0.70 to protect against a breakdown below key support. This allows a 4-5% risk buffer, ideal for volatile crypto markets.

Take-Profit Targets:

Target 1: $0.88 (near-term resistance, ~10% gain).

Target 2: $1.00 (psychological level, ~25% gain).

Scale out partially at Target 1 to lock in profits, holding the rest for Target 2 if momentum persists.

Risk Management:

Risk no more than 1-2% of your portfolio per trade.

Use a risk-reward ratio of at least 3:1 (e.g., $0.03 risk for $0.09 reward).

Monitor RSI (currently ~55) for overbought signals above 70, indicating a potential pause.

Exit Signals:

Exit if ADA/USDT closes below $0.70 on a 4-hour chart, signaling a bearish shift.

Watch for declining volume or bearish divergence on RSI as a cue to secure profits early.

Why This Works: The strategy leverages ADA’s bullish structure, recent whale activity, and potential ETF-driven sentiment. It balances risk with clear entry/exit points for short-term gains.

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