The Price of Cardano (ADA) Breaks Down from Ascending Support Line
The price of Cardano (ADA) broke down from an ascending support line in August, falling toward its yearly lows before bouncing back and validating the $0.25 horizontal support area. However, despite the ongoing bounce, readings from the weekly and daily timeframes suggest a bearish trend and support the continuing decrease of ADA.
Cardano Returns to Pre-Breakout Levels
Technical analysis of the weekly timeframe shows that ADA broke out from a long-term descending resistance line at the beginning of the year, indicating the end of a correction and the start of a new bullish trend reversal. However, the price was rejected by the $0.45 horizontal resistance area in April and has since fallen, reaching a new yearly low of $0.22 in June. The subsequent bounce validated the $0.25 area as support.
Possible Scenarios for ADA Price
- If a bounce occurs, the price of ADA can increase by 70% and reach the $0.45 area again.
- On the other hand, a breakdown from the $0.25 area can cause a 40% drop to the $0.15 horizontal support.
Bearish Outlook from RSI and Elliott Wave Analysis
Both the weekly and daily RSI readings suggest a bearish trend for ADA. The RSI is decreasing and below 50, indicating a bearish market condition. Additionally, the application of the Elliott Wave principle shows a completed A-B-C structure since the June lows, suggesting a bearish trend. The breakdown from the ascending support line in August further strengthens this perspective, despite a positive announcement by Charles Hoskinson.
ADA Price Prediction: Will Bounce Be Sufficient?
Although the outlook is bearish, there is a possibility of a 25% increase that could take the price of ADA to the previous ascending support line at $0.34. However, a return to the $0.25 area would mark an 8% drop, while a breakdown could result in a more than 40% decrease.
Hot Take
Despite the recent bounce, the overall trend for Cardano (ADA) appears to be bearish, as indicated by technical analysis and market indicators. The price struggles to regain its pre-breakout levels and faces resistance at the $0.45 area. Traders should closely monitor the $0.25 support area and the RSI readings for potential signals of further price movements. It remains to be seen whether the bounce will be sufficient to save the breakdown or if ADA will continue its downward trend.
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