ADA Price Analysis: Bulls Trap Threatens Correction Trend to Hit $0.2
Amid the broader market uncertainty, the ADA price resonated within a narrow range of a triangle pattern for the past two weeks. With the recent Bitcoin jump on August 29th, the buyers breached the pattern’s overhead barrier in an attempt to kickstart a fresh rally. However, the overhead supply at an immediate barrier of $0.278 undermined the breakout move and put the sea altcoin at risk of further correction.
Also Read: ADA Price Inches Towards a Decisive Move: $0.3 or $0.2 – What’s in Store?
Cardano Daily Chart: Key Points
- A bullish breakout above the $0.278 resistance is needed to indicate a significant recovery.
- The lower support trendline could bolster buyers to maintain a bullish outlook
- The intraday trading volume in the ADA coin is $375.5 Million, indicating a 133% gain
Source- Tradingview
In theory, the triangle pattern assists in building sufficient momentum for the dominant force and continues a directional rally in the prevailing trend. A bullish breakout from the pattern overhead resistance was expected to release buying pressure but the buyers were blocked at $0.278 resistance.
The aforementioned level aligned with the August 17th high indicates a strong resistance force against buyers. Interestingly, the whole two weeks’ consolidation in Cardano price wavered within the range of aforementioned, indicating a high of $0.278 acted as major resistance, and the $0.238 low acted as strong support.
The daily candle projecting high wick rejection at the aforementioned barrier indicates the overhead supply persists, and the coin holders may witness prolonged sideways until the range pattern is intact.
Here’s Why Cardano May Plunge to $0.22 Support
By the press time, the ADA price traded at $0.264 with an intraday loss of 3%. This price drop plunged below the breached trendline of the triangle pattern, projecting the prior breakout as a bull trap. If the bearish momentum rises, the prices will break below the lower support and plunge the altcoin value to $0.238, followed by $0.2.
- Moving Average Convergence Divergence: A bullish crossover state between the MACD(blue) and signal(orange) reflects the market participants’ positive sentiment.
- Bollinger Band: An uptick in the lower band of the Bollinger band indicator could offer additional support to buyers,