Over the past five months, Cardano‘s ADA price has maintained a bullish trend under the influence of a rising channel pattern. The support trendline of the pattern has been a significant accumulation zone for buyers, helping them reach this year’s peak at $0.4617. However, the recent sell-off in the crypto market has led to a massive breakdown below this pattern, signaling a potential trend reversal.
This latest development can be partially attributed to the recent lawsuit filed against Binance, the world’s largest cryptocurrency exchange, and its CEO Changpeng “CZ” Zhao. The lawsuit has had a substantial impact on the cryptocurrency market, causing the ADA price to drop by 7% on June 5th, effectively breaking down from the channel pattern’s support trendline.
As the breakdown occurs, it’s likely that sellers will apply more pressure to lower Cardano’s price. Currently at a 0.5% decline, the long-wick rejection in the daily candle suggests that buyers are trying to regain control of the trend; however, further challenges lie ahead. In the coming days, the ADA price will likely retest the breached trendline as potential resistance, putting sellers’ ability to maintain supply pressure under scrutiny.
If sellers can sustain their selling momentum, Cardano’s price could experience a significant fall, potentially reaching a first target of $0.3. A minor hindrance at $3.2 should be expected during this downfall. Several indicators, such as the Relative Strength Index (RSI) and Exponential Moving Average (EMA), also paint a concerning picture for Cardano investors.
The daily RSI slope has dipped into the oversold region, suggesting that the price could consolidate below the trendline for a few trading days before continuing its prevailing downtrend. Furthermore, the recently breached daily EMAs (20, 50, and 100) have now accumulated at the overhead trendline, increasing the number of obstacles buyers must overcome to gain an advantage in the market.
Amid these market fluctuations and challenges, Cardano’s Chief has called upon the crypto industry players to unite in the face of the SEC’s lawsuit against Binance. It remains to be seen whether this consolidation will have a meaningful impact on the ADA price and the broader cryptocurrency market.
As always, it’s imperative for investors to conduct thorough market research before making any decisions. The author and the publication do not hold any responsibility for personal financial loss.
Source: Coingape
