Cardano experiences a decline in price following multiple pullbacks.
The weekly chart reveals that ADA has been experiencing significant growth since October 2023. However, despite numerous attempts, it has been unable to break out of a critical horizontal resistance area that has been present on the chart since May 2022.
Cardano has formed six consecutive long top wicks, which indicate selling pressure. This has led to a sharp decline in prices starting in January 2024.
The token is now approaching the level of the previous bullish breakout.
Source: TradingView
The Weekly Relative Strength Index (RSI) is signaling a bearish trend. The indicator has dropped below 70 and continues to decline. These are all indications of a bearish trend.
Where will ADA go: $0.50 or $0.40?
On the daily timeframe, ADA is likely to continue its bearish trend. Price dynamics, RSI signals, and Elliott wave analysis all point towards this conclusion.
The most probable wave scenario suggests that Cardano is currently in wave C of an ABC correction structure. The ratio of waves A:C indicates a potential low of $0.41, which aligns with the 0.618 Fibonacci retracement level.
Price action shows ADA testing the $0.50 area as resistance after a bearish breakout. This is a normal retest following a breakout.
Furthermore, the daily RSI is below 50 and declining, indicating a bearish trend.
If the downward movement continues, the coin could decline by 16% to the 0.618 Fibonacci retracement support level at $0.41.
Source: TradingView
Despite this bearish outlook, a potential return to $0.50 for Cardano could trigger a nearly 30% rise in the asset to the next resistance level at $0.63.
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