On June 5th, the ADA price experienced a significant breakdown from the support trendline of the channel pattern, which has been in an uptrend for the past five months. This event has intensified selling pressure in the market and provided sellers with new resistance for pushing prices to lower levels. The Cardano Foundation’s recent disagreement with the US SEC and the possibility of Robinhood delisting the ADA coin adds more uncertainty to the market.
A breakdown below the local support of $0.323 led to a 7.5% decline in ADA’s price. The downsloping daily EMAs (20, 50, 100, and 200) suggest that buyers will face multiple hurdles before regaining trend control. The intraday trading volume in ADA reached $336.5 million, showing a 19.6% increase.
A bearish breakdown from the support trendline implies the ADA price will likely extend its previous downtrend. The price has already plummeted 9.5% from the breakdown point and is currently trading at the $0.329 mark. Continued selling may trigger another 9.6% drop, leading to the $0.3 psychological mark, a level many traders are watching for potential entry points at discounted prices.
However, the potential target for this pattern breakdown is theoretically the swing lows created during the formation of the channel patterns. Taking a pessimistic view, a successful breakdown below the $0.3 support would send the price tumbling to $0.245. An intraday loss of 7.7% with high volume indicates strong selling momentum in ADA’s price. If the selling pressure persists, the ADA price will likely break the minor support of $0.323 and fall to the $0.3 level. This psychological support won’t be easily shattered, so the price may consolidate above it for several days before any additional decline.
The daily Relative Strength Index (RSI) has plunged into the oversold region, indicating that sellers have been overly aggressive for the time being. Therefore, a minor pullback or consolidation is expected to stabilize the price action. Pivot levels emphasize the $0.323 and $0.3 as crucial support, while $0.35 and $0.374 act as resistance levels.
It is crucial to note that the information presented here is based on the author’s personal opinion and market observations. Adequate research should always be conducted before making any cryptocurrency investments. Neither the author nor the publication accepts any responsibility for potential financial loss.
Source: Coingape
