Midnight [NIGHT], the privacy-focused Cardano [ADA] sidechain, is scheduled to go live in the final week of March. Thanks to this update, the utility token NIGHT posted strong gains recently.
According to CoinMarketCap, it was up 8.78% in 24 hours and up 23.78% in a week at press time. According to AMBCrypto, the former resistance at $0.5 had been flipped to support too.
A closer look at the price charts revealed that $0.056-$0.060 is a key area for NIGHT bulls. Now that they have reclaimed this area as their own, can the bulls drive a rally to $0.10 and beyond?
NIGHT back above a key retracement level
Source: NIGHT/USDT on TradingView
The internal structure on the 6-hour timeframe was bullish, and has been since NIGHT pushed above $0.05 on Friday, 06 February. Since then, the price has made higher highs and higher lows.
However, the higher timeframe momentum wasn’t strongly bullish. The deep retracement to the local low at $0.04 underlined the strength of sellers, which was a threat to the bulls on the way to recovery.
The CMF was back at +0.01 after climbing to +0.23 on 18 February. It was an early sign that the buying pressure might not be a sustained push, which could slow any further gains. Meanwhile, the DMI showed that a strong uptrend was in progress, agreeing with the findings based on the internal structure.
Bulls should resist FOMO and arguments of relative strength
Bitcoin [BTC] has been oscillating between the $65k and $71k levels over the past two weeks. If BTC can climb higher, it could see renewed enthusiasm among altcoins, including NIGHT. Until then, swing traders need to remain wary.
Source: CoinGlass
The 1-month liquidation heatmap showed that NIGHT had just tagged a significant cluster of short liquidations at $0.063-$0.065. The lack of clear, sustained demand and early candlestick signs of buyer exhaustion at this zone were worrying too.
It is possible that the sweep of the magnetic zone at $0.065 would be followed by a descent to the $0.054 area next. Traders need to watch out for this possibility and beware of going long early.
Final Summary
- The sweep of the liquidity at $0.065 may be a strong indication that a temporary pullback was brewing.
- The $0.056-$0.060 area is a short-term demand zone that swing traders can expect a bullish reaction at.
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.