The token could approach this year’s low if the decline continues. However, there’s no indication yet that the ADA will fall to a new yearly low.
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Cardano failed to consolidate the bullish breakout
According to technical analysis of the daily chart, the picture on ADA looks bearish for a number of reasons.
A number of reasons.
First, the market recently made a breakout of a short-term descending resistance line that has been present on the chart since April 13th. This breakout was potentially a strong and clear bullish signal, indicating the end of the bearish trend and the beginning of a new bullish trend.
The token failed to consolidate this rise and was pushed back to the $0.36 area (red icon).
The token, however, failed to consolidate this rise and was pushed back to the $0.36 area (red icon). This was the catalyst for the decline, bringing the price back to pre-bullish breakout levels.
Source: TradingView
In addition, the daily relative strength index (RSI) is giving bearish signals. This momentum indicator is currently below the 50 mark and is showing a downward trend (red circle). This indicates a bearish trend.
ADA forecast: a short-term bearish breakout has accelerated the decline
Meanwhile, wave analysis of the shorter 6-hour timeframe also paints a dismal picture. It indicates the completion of the corrective structure A-B-C (black color). Since this correction is directed upward, it suggests a likely bearish broader trend.
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This was confirmed when the ADA price broke through a short-term ascending support line on July 31st. So, the previous 72% increase has ended and a new decline has begun.
So the previous 72% increase has ended and a new decline has begun.
The six-hour relative strength index (RSI) is also bearish as it is below the 50 level and declining.
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Source: TradingView
Despite the bearish short-term outlook, a potential ADA reversal could take the price back to the broken rising support line at $0.33. It is expected to play the role of resistance in this case.