Cardano has lost key support. What does this mean for the ADA?
Date: 2023-08-05 Author: Karina Ziganova Categories: BUSINESS, IN WORLD
The price of Cardano (ADA) has broken through a short-term rising support line, indicating the end of the previous uptrend.
If the decline continues, the token may approach the low of this year. However, there are no signs yet that ADA will fall to a new yearly low.
Cardano Failed to Consolidate Bullish Breakout
As the results of the technical analysis of the daily chart show, the ADA picture looks bearish for a number of reasons.
First, the market recently broke through the short-term descending resistance line that has been on the chart since April 13th. Potentially, this breakout was a strong and distinct bullish signal, signaling the end of a bearish trend and the start of a new bullish trend.
However, the token was unable to consolidate this growth and was thrown back to the $0.36 area (red icon). This acted as a catalyst for the decline, causing the price to return to the levels that preceded the bullish breakout.
In addition, the daily Relative Strength Index (RSI) is bearish. This momentum indicator is currently below 50 and showing a downtrend (red circle). This indicates a bearish trend.
ADA Forecast: Short-term bearish breakout accelerated decline
Meanwhile, wave analysis of the shorter 6-hour timeframe also paints a bleak picture. It indicates the completion of the corrective structure A-B-C (black). Since this correction is up, it indicates a likely bearish broader trend.
This was confirmed when the price of ADA broke through a short-term rising support line on July 31st. This means that the previous growth of 72% has ended and a new decline has begun.
Moreover, the six-hour Relative Strength Index (RSI) is also bearish, as it is below the 50 level and is declining.
Despite the bearish near-term outlook, a potential ADA reversal could bring the price back to the broken upside support line at $0.33. It is expected that in this case it will play the role of resistance.
