Cardano (ADA) Price Faces A Risk of Sell-Off After Being Declared An Unregistered Security by SEC
The price of Cardano (ADA) has broken down below its long-term pattern. It is likely to continue declining in the coming days.
Recently, the SEC has accused Cardano (ADA) of being an unregistered security in their lawsuit against the Coinbase exchange. This could have a negative impact on the ADA price.
Ascending parallel channel
The price of Cardano (ADA) has been trading within an ascending parallel channel since its yearly low at $0.24. This is a bearish pattern that often leads to a breakdown in most cases.
Indeed, it broke down below this channel on June 5th after confirming the previous horizontal support at $0.38 as resistance (red arrows).
As this pattern has been in existence for 158 days,the movement after the breakout will be very strong. Therefore, the ADA price may decline towards the support zone at $0.3 in the coming days. Breaking below this level could potentially drive the ADA price to its yearly low at $0.24.
The daily RSI indicator supports this possibility by staying below 50 and trending downwards.
Weekly outlook
The weekly chart shows that ADA’s price has been declining since making a deviation above the resistance zone at $0.41. Such deviations are often followed by a sharp drop.
Furthermore, the deviation took the shape of a bearish engulfing candlestick pattern (red ellipse), further reinforcing its significance.
The weekly RSI indicator has also dropped below 50 and confirmed it as resistance (red arrow).
Therefore, the weekly timeframe aligns with the daily timeframe, indicating that ADA’s price will likely continue to decline in the near future.
Conclusion
The most probable outlook suggests that the ADA price will continue to decline in the coming days. The nearest target is $0.3, and potentially even lower towards $0.24.
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.
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