Cardano experiences a decline within a correction pattern
Cardano’s value surged to an annual peak on December 14, 2023, and has since undergone a decline. This decline confirms the presence of a price deviation above the horizontal resistance area (indicated by the red circle).
During this movement, Cardano’s price remained within a descending parallel channel. The channel’s resistance and support lines have been tested multiple times, with the support line further reinforced by the Fibonacci retracement level. Currently, ADA is trading in close proximity to the channel’s support line.
Source: TradingView
The daily relative strength index (RSI) is providing negative signals. It is below the neutral level of 50 and is declining (indicated by the red icon). These indicators are typically associated with a bearish trend.
ADA Forecast: Potential Bearish Breakout or Rebound
The six-hour timeframe aligns with the pessimistic forecast from the daily chart. This alignment is due to price dynamics, the RSI index, and Elliott wave analysis.
The price has broken through the horizontal support area of $0.48, which has been present on the chart since the beginning of the year. The RSI further supports this bearish outlook as it remains below 50 and continues to decline.
Based on Elliott wave theory, ADA is currently in wave C of an ABC correction structure. Assuming a 1:1 ratio between waves A and C, this suggests a potential low of $0.405, which is approximately 11% below the current price.
Source: TradingView
However, if the token experiences a recovery and surpasses the $0.48 horizontal area, it would invalidate the bearish breakout scenario. In that case, ADA may rise by 25% to reach a range high of $0.62.
Telegram channel
Disclaimer
All information contained on our website is published based on good faith and objectivity, and solely for informational purposes. The reader assumes full responsibility for any actions taken based on the information obtained from our website.