Cardano (ADA) Price May Drop Sharply In The Near Future, This’s A Potential Target
The price of Cardano (ADA) is currently trading within a long-term support zone but has broken down below a short-term horizontal support area. This could potentially lead to a break below the long-term support, triggering a significant selling pressure.
The price of Cardano (ADA) has been declining since reaching its yearly high at $0.46 in early April 2023. During this period, the price dropped to the support zone of $0.24-$0.25 in early June and then rebounded.
This rebound formed a double bottom pattern when compared to the low created in December 2022. This is a bullish pattern that often signals a trend reversal to the upside. The pattern is more significant when it appears on the weekly timeframe and is combined with bullish divergence in the RSI indicator.
However, the subsequent recovery was rejected by the resistance zone at $0.38, forming a very long upper wick (red arrow). This indicates strong selling pressure at higher levels.
Currently, the ADA price is approaching the $0.24-$0.25 support zone once again. A bounce from this level would push the price towards the resistance at $0.38, while a breakdown could quickly lead to a test of the critical support zone at $0.15.
The weekly RSI indicator has broken below the rising trendline and is trending downwards, indicating a potential advantage for the bears.
Furthermore, incidents in the RSI indicator often lead to similar developments in price action. Therefore, ADA’s price could potentially break below the $0.24-$0.25 support zone in the near future.
Short-Term Support Breakdown
The daily chart supports the outlook for a price decline from the weekly timeframe. It shows that ADA has broken down below the nearest horizontal support zone at $0.25.
This breakdown could trigger stop-loss points and push the price below the long-term support zone at $0.24-$0.25.
The daily RSI indicator supports the continuation of the decline as it approaches the oversold region and trends downwards.
The most likely scenario suggests that the ADA price will break below the long-term support zone at $0.24-$0.25 and continue to decline in the near future. The potential target for this move is the $0.15 range.
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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