Bearish Pattern Puts Cardano Coin At A Risk Of Longer Correction
Over the last five weeks, the Cardano coin price turned down twice from near the $0.42 resistance zone. These two rejection indicates the sellers continue to defend this level and encourage further downfall. Moreover, the daily chart revealed the formation of a famous bearish pattern called double top which also offers entry opportunities to interested short sellers.
Key Points:
- In theory, the double top pattern is formed when the asset’s bull run reached a peak and is unable to carry further growth
- A bearish breakdown from the $0.355 could set the ADA price for an 18% drop
- The intraday trading volume in the ADA coin is $345.5 Million, indicating a 13% loss.
Source- Tradingview
On February 16th, the Cardano coin showcased a sharp reversal from the $0.42 resistance. This resulting downfall tumbled the prices by 13% where it currently trades at the $0.36 mark. However, this price drop is part of a bearish reversal pattern called a double top pattern.
This pattern is visible when the asset price turndown from a fixed horizontal resistance twice forms an ‘M’ shape structure. Thus with sustained selling, the ADA price may drop another 3% and retest the $0.355 support.
Under the influence of the bearish pattern, the coin price is likely to break the $0.355 support. A daily candle closing below the $0.355 support will accelerate the selling pressure and signal the upcoming correction phase.
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In an ideal case, the post-breakdown fall could plummet the prices by 18% down to hit the $3 psychological support.
On a contrary note, if the ADA price shows sustainability above the $0.355 support, the price trend may turn sideways and consolidate in the short range.
Technical Indicator.
Relative Strength Index: the falling RSI slope nosedived below the midline(50%) indicates increasing negative sentiment around the Cardano coin.
Bollinger band: the coin price breaks below the indicator midline project the sellers are currently controlling price movement.
Cardano Coin Price Intraday Levels
- Spot price: $0.36
- Trend: Bearish
- Volatility: Low
- Resistance level- $0.42 and $0.48
- Support level- $0.35 and $0.325
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