The Cardano (ADA) cryptocurrency has been on a downward trend since mid-December 2023, recently breaking below a key support level that is now acting as resistance. This article delves into ADA’s price movements and technical analysis to forecast potential future scenarios.
Weekly and Daily Chart Insights
On the weekly chart, ADA’s price has been unable to break a significant resistance level established since May 2022, despite a rise since October 2023. The formation of six consecutive long upper wicks signals strong selling pressure, culminating in a sharp decline in January 2024. The Weekly Relative Strength Index (RSI) indicates a bearish trend, having dropped below 70.
The daily chart analysis suggests ADA is in a bearish phase, potentially moving through a corrective A-B-C structure, with the C wave pointing to a possible low of $0.41. This level coincides with the 0.618 Fibonacci retracement support. ADA’s failure to maintain above $0.50, now a resistance, further confirms the bearish outlook.
The RSI on the daily chart is another indicator of bearish momentum, remaining below 50 and trending downwards. If the negative trend persists, ADA could see a 16% drop to the $0.41 support level.
However, if ADA manages to reclaim the $0.50 mark, it could lead to a significant recovery, potentially surging around 30% to the next resistance level at $0.63, altering the current bearish narrative.