If that happens, ADA will confirm the current bearish trend. In this case, the rate of decline could accelerate.
Cardano failed to recover above resistance
ADA is the native token of the blockchain platform Cardano, created by Charles Hoskinson.
As the results of technical analysis of the daily chart show, the prospects of the coin are very bleak. Both price dynamics and technical indicators are signaling that.
Then on April 20, the token made a bearish breakout from the long-term upward parallel channel in which it had been trading since March 10.
This pattern is thought to be a retracement pattern, so a northward swing suggests that the broader trend in the currency is bearish and that eventually the price will break south out of this channel.
Also, on April 27, the ADA tested the support line of that channel (red icon) as resistance, after which it continued its decline.
In addition, the Relative Strength Index (RSI) is bearish as it stays below 50.
This index is a momentum indicator, indicating the overbought/oversold market, depending on whether it is above or below the 50 mark.
It fell below 50 in parallel with the bearish price breakout from the channel, which further strengthens the significance of this breakout.
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ADA: Is a bearish breakout imminent
On the shorter 6-hour timeframe, the coin’s rate has sagged under a downward resistance line since April 15. Until the price can recover above that level, the trend is bearish.
The ADA is now trading around $0.36.
The ADA is now trading around $0.36. This support is formed by the horizontal support area and the Fibo level of 0.618 retracement.
Fibonacci levels are traditionally considered the most likely placeholders for stopping and reversing the price after a significant advance in any one direction.
As expected, at these levels, the market can win back some of the distance traveled and only then resume the movement in the original direction.
In addition, they can determine the marginal levels of price moves. In this case Fibo 0,618 often plays the role of the bottom, if the decrease of the price was only a correction.
So if the ADA breaks through the horizontal support of $0.36, it might slide towards the support of $0.33 on the daily timeframe and maybe even to $0.30.
In the meantime, a bullish break-up of the short-term line can trigger an upside movement towards $0.42.