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The last three weeks’ price action in the Cardano coin showcased the formation of rising wedge patterns. This chart pattern usually occurs in a downtrend and is characterized by converging trendlines that slope upwards. The pattern is considered a bearish continuation because it signals a potential reversal and a trend reversal to the downside. Thus, on February 5th, the ADA price gave a bearish breakdown from the pattern’s support trendline, indicating the coin holders may have witnessed a significant downfall.
Key Points:
- The formation of a falling wedge pattern is itself a sign of bullish momentum getting exhausted a chance of potential correction is high
- A bearish breakdown from the pattern’s support trendline sets ADA for 17.5% down to $0.325
- The intraday trading volume in the ADA coin is $275.4 Billion, indicating a 24% gain.
Source- Tradingview
By the press time, the Cardano price trades at $0.397 and is going through a retest phase. The 4-hour chart showcased higher price rejection during the retest to the breached trendline, indicating the sellers are defending the newly obtained resistance.
Furthermore, the higher swing low developed during the chart formation is a potential target for short selling. Thus, if the selling pressure in the market persists, this breakdown could lead the price to follow support such as $0.37, $0.358, and $0.325.
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However, concerning the size of the pattern, this correction can be considered temporary to the overall recovery phase. Moreover, this bearish pullback could offer buyers a small break to replenish the bullish momentum and resume the prior recovery.
Thus, the coin holder should keep a close eye on the aforementioned support and they each are strong support zones to resume a bullish rally.
Technical Indicator.
Relative Strength Index: an evident downfall in the daily RSI slope against the rising prices indicates weakness in bullish momentum. This bearish divergence increases the probability of an upcoming downfall.
EMA’s: A potential bullish crossover between the 50-and-100-day EMA offer should strengthen bullish growth in ADA
Cardano Coin Price Intraday Levels
- Spot price: $0.392
- Trend: Bearish
- Volatility: Medium
- Resistance level- $0.414 and $0.438
- Support level- $0.373 and $0.353
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