Cardano (ADA) Rebounds Above $0.30, But Joy May Be Short-lived

Cardano (ADA) has reached the descending resistance line that has been on the chart since August 2022. From here, a price rebound may occur. Following the results of the past week, the Cardano project coin (ADA) broke into the number of intraweek growth leaders among the top 10 largest cryptocurrencies by market capitalization against the backdrop of a number of positive news for the project. Last week, Cardano, a developer of decentralized blockchain solutions, introduced a toolkit for deploying sidechains.. It also became known that the indicator of all assets blocked in the protocol (TVL) reached a 2-month high, while since the beginning of the year it has grown by 40%, although it still remains well below historical highs. In addition, the Cardano foundation project announced on Twitter that its representatives will visit the International Economic Forum in Davos and organize a panel event “Blockchain for Good” within its framework.. Cardano reached a decisive level According to the results of technical analysis, the coin has been declining since May 10, moving along a descending resistance line. During this time, the price hit a low of $0.238. This happened on December 30, and then the ADA rate grew. During this period, the market tested this line for strength four times (red icons). The last time it happened was January 14th.. With each price touch, the lines become weaker, so eventually a bullish breakout of this level is most likely.. In this case, the next resistance will be the $0.425 area.. The significance of this horizontal area is enhanced by the fact that for 247 days it alternately played the role of resistance and support.. Accordingly, only a recovery above it will allow us to consider the trend for Cardano as bullish. Technical indicators show no signs of weakening yet. The RSI is overbought but is not yet signaling a bearish divergence, so the rally still has a chance to continue. Source: TradingView Will the bounce lead to a correction Despite the bullish picture on the daily chart, the 6-hour time frame indicates the possibility of a pullback before the price continues to rise. The reason for this is bearish divergence signals on the 6-hour RSI (green line). The significance of this divergence is enhanced by the fact that it coincides with the line of long-term resistance. Potential decline could begin within the next 24 hours. At the same time, two potential support levels are located at $0.320 and $0.305. These are the Fibo levels of 0.382 and 0.5 retracements, respectively.. The last level also coincides with the ascending support line, so it is more important, and it is more likely that the price will bounce from it.. His bearish break will signal the end of the entire bull run. Meanwhile, a bullish break of the long-term downside resistance line will cancel the short-term bearish outlook for Cardano. Source: TradingView Thus, the daily chart suggests a bullish outlook for the ADA, but the 6-hour timeframe warns of the possibility of a pullback before the resumption of growth. However, a bullish breakdown of the long-term downward resistance line will signal that there will be no pullback. Earlier, the editors of BeInCrypto discussed whether the sharp rise in the price of Bitcoin (BTC) can be considered the beginning of a bullish trend, and also analyzed an on-chain indicator that potentially signals the beginning of a bull market for Bitcoin. Disclaimer All information contained on our website is published on the principles of good faith and objectivity, and for informational purposes only.. The reader is solely responsible for any actions taken by him on the basis of information received on our website.