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Cardano - Continuation of bullish reversal

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Cardano has experienced a major pullback from its all-time high at $3 earlier this year. The bleeding has been relentless, but there are signs of bullish reversal now. Starting on the weekly chart, the last weekly close posted a bullish engulfing candle which reversed the previous two weeks of bearish price action.

On the daily timeframe, we can see that ADA broke through a key resistance level at $1.46 and has since held it as support on a bullish retest.

Importantly, ADA is also showing relative strength against BTC and ETH for the first time in several months. Today, while BTC and ETH are currently down by approximately 3%, ADA is currently down by only 1%. Since BTC and ETH are the market leaders, this shows that market participants consider ADA to be undervalued at these prices. We can expect this relative strength to continue if BTC/ETH price action flips bullish.

On this basis, I am long from the support level at $1.46, with a tight invalidation as shown below. Take profit levels are at $1.67 and $1.96.