<

Cardano (ADA) Price Could Drop 26% After Recent False Breakout

The price of Cardano (ADA) has formed a deviation above the significant resistance zone and shows signs of weakness. It is expected to continue decreasing in the near future.

Long-Term Resistance Zone

Cardano (ADA) price broke above the long-term horizontal resistance zone at $0.66 during the week from February 26th to March 3rd, 2024, with a large bullish candle. This action indicates that the previous uptrend has continued.

However, instead of a strong increase, the price only consolidated right above the $0.66 zone and fell back below it after 3 weeks. Last week, the price confirmed this zone as resistance once again (red arrow).

This is a bearish signal, indicating that the previous breakout was merely a deviation and is often followed by sharp declines.

The weekly RSI (Relative Strength Index) has formed a significant bearish divergence (red line) and crossed below 70, indicating the return of the bears.

Therefore, the ADA price may decrease to the significant support zone at $0.46 in the near future. This figure corresponds to a 26.47% decrease from the current price level.

ada-drop-shrappy
ADA/USDT weekly chart. Source: TradingView

Short-Term Prospects

The 4-hour chart shows that the ADA price has broken down below the small horizontal support zone at $0.68 and confirmed it as resistance on March 26th. This indicates that the bears are selling on small recovery attempts.

The daily RSI has confirmed the 50 level as resistance and slopes downwards, signaling that the bears are controlling the price action in the short term.

Therefore, the ADA price may decline to the nearest horizontal support zone at $0.57 in the coming days.

ADA/USDT daily chart. Source: TradingView

Conclusion

The most likely prospect suggests that the ADA price will continue to decrease in the near future. The nearest target is $0.57 and lower towards $0.46.

The bearish view will be invalidated when the ADA price clearly breaks above the $0.66 zone on the weekly timeframe.

Disclaimer: Please note that this article is for informational purposes only and should not be taken as investment advice. As an investor, it is important to do your own research before making any decisions. We are not responsible for any investment decisions you make based on this information. Not Financial Advice.

Read more:

Join us on Telegram

Follow us on Twitter

Follow us on Facebook

Follow us on Reddit

You might also like