Over the past five months, the Cardano price has experienced a sustained recovery, forming a rising channel pattern that provided a solid accumulation zone for buyers. With crypto market volatility on the rise, the price recently broke through the extended support level, suggesting that an ADA correction could be underway.
A breakdown from the channel pattern may lead to a significant correction in ADA’s price. But if the coin’s price surges back above the breached trendline before the weekend, this bearish outlook would be invalidated. Currently, the intraday trading volume of ADA sits at $134.4 million, a decline of 17%.
On May 25th, the Cardano coin price showcased its third consecutive day of decline, falling below the channel pattern’s support trendline. This development signals a loss of crucial support for buyers, giving sellers an edge in pushing the price down. If sustained selling continues, ADA’s price could slide to $0.3, marking a potential loss of 17%.
However, the relatively weak breakdown from the channel pattern, combined with lackluster volume confirmation, suggests that potential sellers should wait for price sustainability below the breached trendline before entering the market. In the case that ADA’s price jumps back above the trendline within the week, the breakdown would be viewed as a bear trap.
A bearish breakdown from the channel pattern has resulted in a potential downfall for ADA, with the price likely to hit the next significant demand zone at $0.3. Nonetheless, the falling price may encounter minor obstacles at $0.348 and $0.324.
The Bollinger Band indicator’s upswing in the lower band shows that market sentiment remains sluggish, and better confirmation is needed to demonstrate seller dominance. On the other hand, the Relative Strength Index (RSI) potentially dropping below the 40% mark reflects aggressive selling momentum in ADA.
While the current market analysis of Cardano may signal a downturn, it is vital to consider the overall market condition and conduct personal research before investing in cryptocurrencies. The author or publication does not hold any responsibility for personal financial loss, as projected outcomes are subject to change.
Source: Coingape
